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Saturday, 25 June 2011

Discuss the merits or advantages of life insurance

Advantages of Life Insurance :-
Following are the main 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 policy holders.

2. Financial Aid :-
After the death of a policy holder 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 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 concessions to the policy holders. It is also an advantage of life insurance.

7. Credit Facility :-
A policy holder can also obtain credit from various financial institutions against the life insurance policy.

8. Security and Peace of Mind :-
A policy holder feels security and peace of mind that in case of his sudden death, his family will not face the financial problem. The life insurance also provides relief and security to the dependents.

9. Lump Sum Payment :-
If the policy holder survives then insurance company pays him lump sum amount. He can purchase the house with the money or he can do any business. It is also an advantage of insurance company.

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