Life insurance is basically an agreement between a life insurance company and a policy buyer where the insurance company agrees to pay compensation as a death benefit to the nominated beneficiaries upon the death of the insured during the term of the life insurance policy.
The death benefit promised by the life insurance company is offered on the exchange of premium paid by the policy buyers.
Life Insurance Policy is the safest and the most secure way to safeguard your family or dependents against various financial contingencies that may occur due to an unfortunate event of your ill-timed demise.Answer : 17
Under a Life Insurance Plan in India, the insurance company guarantees to pay a specific sum to the policyholder's family on his/her demise. Also, a life insurance policy can compensate against some other contingencies like a terminal illness or a critical illness if added under the contract. Some other things like funeral expenses can also be received as a part of life insurance benefits if defined in the contract.
Apart from the death benefits, a Life Insurance policy in India also offers maturity benefits. These benefits are generally offered in the form of payment if the insured stays alive through the entire term of the life insurance plan. Furthermore, life insurance plans also provide with a number of tax benefits under Section 80C of the Income Tax Act, 1961.
The life insurance company in India generally establishes the specific premium payment that has to be made by the policyholder to the company. However, the applicant is given the alternative to decide the term of the life insurance policy and the sum assured.