Five Creative Uses of Life Insurance Policy You Never Thought Of

Most people in Indiai buy a life insurancei policy to provide theiri loved ones with much-neededi financial security while theyi are not around. Therei are other ways toi use life insurance, readi on to find outi how.

 

For most people ini India, buying a lifei insurance policy is onei of the most importanti aspects of financial planningi for the future. Noti only does it ensurei financial protection to thei loved ones in thei event of the untimelyi death of the breadwinner,i but also it servesi as an inheritance. Leti us look at somei of the more creativei ways you can usei your life insurance policy.

Takei care of your lovedi ones’ expenses

You may worki hard all through youri life to provide fori your loved ones andi ensure that all theiri needs are met. However,i have you thought whati will happen to them,i if something were toi happen to you? Doi you have any plansi or financial provision fori them, so that theyi will be able toi live the lifestyle theyi are used to? Thisi is where having ai life insurance cover cani be a big boon.i In case any untowardi incident results in youri untimely death, your familyi or more specifically, thei appointed nominee will geti the death benefit, whichi can be used fori meeting the general expenses.

Inheritance

Asi the head of thei family, you would surelyi want to leave behindi a significant sum ofi money for your family.i Also, you would wanti to reduce your taxi burden. Having a lifei insurance cover can helpi you with both. Ifi you have invested ini a term life insurance,i the insurance company willi pay a lump sumi amount as the deathi benefit to the appointedi nominee. The nominee cani use the money fori meeting the expense likei paying off the dues,i pay for the child’si education fees. The besti part, the inherited moneyi is subject to ai tax deduction.

Create an alternativei source of income

During youri active working life, youi may have to incuri various important expenses likei mortgage, Credit Card dues,i medical emergency. However, thisi can have a significanti impact on your savings;i you may not bei able to have ai significant saving for thei future. Not to mention,i you cannot be workingi all through your life,i you would have toi retire at some point.i You would want toi create a corpus fori your post-retirement life. Therei are many life insurancei plans like the savings-cum-protectioni plans that allow youi to get valuable returnsi every month and buildi a corpus fund fori retirement. Make sure thati you do your researchi well about the variousi insurance plans available ini the market and choosei the one that besti suits your needs andi has a premium thati is affordable for you.

Reducei the tax burden

As ai working professional in India,i you are liable toi pay taxes on thei income you earn. However,i there are certain waysi by which you cani save your tax burdeni and enjoy the benefiti of tax deduction. Asi per the Indian Incomei Tax Act, the moneyi you pay towards youri life insurance is liablei to tax exemption. Thus,i investing in a lifei insurance policy gives youi dual benefits of protectioni as well as taxi savings.

Charity

This is one ofi the lesser known usesi of life insurance. Youi can buy a lifei insurance policy and appointi a charitable organisation thati you support as thei beneficiary. This will noti only help you accomplishi your philanthropic, but thei benefits of the policyi will be provided toi the charity that youi hold so dear.