The policyholder is the individual who purchases a life insurance plan. The nominee or beneficiary as listed in the policy is the individual who receives the insurance plan benefit amount which is referred to as the sum assured,
after the death of the life insured. The nominee is usually a family member or a dependent.
Life insurance is a long-term financial step in saving and creation of your wealth. It can help safeguard the future in financial terms. Thus, it fundamentally provides both saving as well as protection.
Depending on the life stage you are at, the kind of financial goals you plan to serve, and the risk appetite you carry, you can choose a life insurance product that aligns with your requirements. It can be a term insurance
product if you want a pure protection product or a hybrid product like ULIPs or moneyback plans if you seek steady returns for funding your kid’s education or a pension plan that can bring you steady income post-retirement.
As mentioned before, life insurance plans feature high on the list of tax-saving mechanisms. The premiums that you pay for your life insurance plan is eligible for a tax deduction of up to Rs. 1.5 lakh under Section 80C, 80CC,
80CCE of the Income Tax Act, 1961. As per Section 10 (10D) of the Income Tax Act, 1961, the maturity and death benefits are also exempt from taxation.
Life insurance premium is heavily determined by the age of the policyholder, which is why it is advised to get life insurance policy early in life. If the potential policyholder is young, the premium rates of the policy will
be low as compared to the premium rates for an older individual. This is because young people are considered less prone to life-threatening diseases and the possibility of death.