Most people buy life insurance plans so that their loved ones get a tax-free lump sum amount to pay off any pending financial liabilities and secure their future. However, this no way implies that life insurance plans are only for people who do not have that money saved. Even if you have a high annual income or high net worth, you can still avail of the benefits of life insurance. In fact, for a wealthy individual, life insurance can be a great tool to protect your inheritance and support your family.
Why are life insurance plans a good investment for wealthy individuals?
1. Tax laws favour life insurance plans: Among the many other benefits of life insurance, the top most is that the family life insurance plans enjoy tax exemption under the prevailing tax laws. As per tax laws, life insurance plan premiums and proceeds get tax benefits under Section 80C and Section 10(10D) of the Income Tax Act, 1961, respectively. This means that the premiums you pay have tax benefits, while the proceeds your family or the beneficiary get are also tax-exempt.
This is highly advantageous for you since you can maximise your after-tax estate/inheritance and have more money to pass on to your heirs. Moreover, since your heirs are not required to pay any taxes on the benefit from life insurance plans, it is a win-win from both ends.
2. Uncertain future: You might have substantial savings to be able to self-insure yourself and your family. However, it is unwise to think that because you are living comfortably in the present, you will not need any financial protection in the future. The future is uncertain, and your responsibilities change with each life stage.
Today, you might have enough to leave your spouse enough financial support or pay for your child’s education expenses. But over time, taxes, inflation and rising consumer prices could significantly decrease the inheritance your loved ones receive upon your death. Since life insurance proceeds are exempt from taxes and offer substantial protection against the worst-case scenarios, family life insurance plans could serve as an ideal inheritance for your family.
3. Grow your money: You might be wealthy now and have sufficient to provide for your family in the present and even in the future. But the times are changing, and every day the value of money diminishes. Inflation is eroding even years of savings. In such cases, you do not want your family to have only a limited financial sum to meet their living expenses. With a life insurance plan, you can grow your wealth and achieve returns that can help your loved ones combat the impact of inflation in the long run.
4. Alternate source of income: In the case of your unfortunate demise, your family will lose a major source of income. Even if you leave a legacy, inheritance or lump sum corpus for their financial security, none of those can replace the value of a regular stream of income. If you are covered under a group life insurance policy, the benefits are extended to your family members and you can opt to create a regular income for your family in the case of the loss of your income. This will help them meet their everyday living expenses without affecting their corpus, which can eventually support their long-term financial goals.
5. Rising medical expenses: One of the major concerns for everyone – wealthy, average or below average income families, is the steeply rising medical expenses. Moreover, uncertainties like the COVID-19 pandemic can further cause huge financial stress, irrespective of your income or your wealth corpus. Medical expenses could erode even years of your savings and cause the family to struggle financially. However, by choosing from among suitable family life insurance plans, you can ensure your family’s future sustainability.
Even if you are wealthy enough or confident that your beneficiaries will not need a death benefit, life insurance plans can act as a solid financial cushion for your family and their finances for uncertainties ahead. You can check out our life insurance plans online on our website!
Know more about term plan, term insurance and savings plan at PNB MetLife.
Disclaimer:
The aforesaid article presents the view of an independent writer who is an expert on financial and insurance matters. PNB MetLife India Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and PNB MetLife and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability or medical complications incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ health advisor before making any decision.
PNB MetLife India Insurance Company Limited
Registered office address: Unit No. 701, 702 & 703, 7th Floor, West Wing, Raheja Towers, 26/27 M G Road, Bangalore -560001, Karnataka
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For more details on risk factors, please read the sales brochure and the terms and conditions of the policy, carefully before concluding the sale.
Tax benefits are as per the Income Tax Act, 1961, & are subject to amendments made thereto from time to time.
Please consult your tax consultant for more details.
Goods and Services Tax (GST) shall be levied as per prevailing tax laws which are subject to change from time to time.
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Call us Toll-free at 1-800-425-6969, Phone: 080-66006969, Website: www.pnbmetlife.com, Email: indiaservice@pnbmetlife.co.in or Write to us: 1st Floor, Techniplex -1, Techniplex Complex, Off Veer Savarkar Flyover, Goregaon (West), Mumbai – 400062, Maharashtra. Phone: +91-22-41790000, Fax: +91-22-41790203.
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As your trusted life insurance partner, PNB MetLife is with you amidst the current COVID-19 outbreak. Our policies also cover COVID-19 Claims. In case of a Death Claim, kindly submit the signed Claim Intimation Letter mentioning the policy number, brief of the insured event and other claim documents on the email mentioned herewith. Please write-in to us at claimshelpdesk@pnbmetlife.com or indiaservice@pnbmetlife.co.in. You can also call us on 1800-425-6969 for death claims intimations and for any queries on Monday - Saturday between 10:00 am - 7:00 pm.
PNB MetLife Insurance, amongst the trusted Life Insurance companies in India, aims to provide a wide range of Life Insurance products that suits the needs of an individual at every stage of his life. Life Insurance Plans range from Term Life Insurance Plans, Term Plan, Protection Plans, Long Term Savings Plans , Retirement Plans & Child Education Plan.
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