Q.6 Discuss the advantages of life insurance?
Ans: ADVANTAGES OF LIFE INSURANCE
Following are the advantages of life insurance: –
1. PROMOTES SAVINGS
The insured person saves the money to pay the premium of the policy. So it develops the habit of savings among the policyholders.
2. FINANCIAL AID
After the death of a policyholder insurance company pays the insured amount to the heirs. So the family gets the financial aid to face many problems.
3. PLANNING FOR FUTURE
Life insurance is very useful for the last age of a person. At that stage man cannot do any job so due to the availability of insured amount he can lead a good life.
4. PAYMENT OF DECEASED DEBTS
Due to a sudden death the debts can be paid by the insured amount.
5. PROFIT EARNING
Life insurance not only provides financial aid to the family of a deceased person but also gives profit on the capital.
6. TAX CONCESSION
Sometimes government provides tax concession to the policyholders. It is also an
advantage of life insurance.
7. CREDIT FACILITY
A policyholder can also obtain credit from various financial institutions against the life insurance policy.