Life insurance is a contract between a policy holder and a life insurance company , wherein the insurance company offers financial coverage , in exchange for the life insurance premium paid during the policy term. Premium paid gets tax benefits under section 80C and 10D of the income Tax Act 1961.
A Life insurance company pays a pre-defined amount as a policy benefit to the beneficiaries.
A life insurance policy act as a financial net in case of eventuality linked with human life, such as disability , accident,death etc. In case of sudden demise of the primary breadwinner of a family, apart from the emotional trauma, his/her family will be at the risk of a financial crunch due to loss of income.In order to make sure that one’s family doesn’t have to make any compromises due to financial crunch, one should buy a suitable life coverage plan. It will help his/her family to sail through the tough times with dignity.