Life insurance is an important plan that provides financial security to a personโs family. This means that if an unexpected situation occurs, the policy will help the insured person’s family live without facing financial problems.
Although it is an important protection, many people still do not have a proper understanding of life insurance. Some people consider it to be a complicated and time-consuming process.
Ethos Life Insurance is trying to change this misconception. They simplify the life insurance process and explain it in a way that anyone can easily understand.
1.Life insurance has been around for centuries.
Life insurance is not a new concept. It has been around for centuries. The basis for this was in ancient civilizations. For example, during the Roman Empire, there were groups called โburial clubs.โ When a person died, the members of these burial clubs would contribute money to cover his funeral expenses. Thus, this system of providing financial assistance to the family after the death of a person was the basis for the life insurance plan that we see today.
Important note: If a person has taken out life insurance in the United States, the amount that his family receives after his death is called a death benefit. This amount is generally not subject to federal income tax. That is, in the United States, the beneficiaries will receive the entire amount and will not have to pay income tax on it.
According to Indian law, according to Section 10(10D) of the Income Tax Act, the death benefit amount received through life insurance is exempt from income tax. That is, the amount received by the family after the death of the policyholder is generally not subject to tax.
But there are some exceptions (for example, policies with very high premiums). In those circumstances, the exemption may not be available.
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2.The life insurance amount is generally tax-free.
If a person has taken life insurance, after his death, his family (beneficiary) will receive a sum from that policy. This amount is called a death benefit. Generally, this death benefit amount is not subject to income tax.
Therefore, the family can receive the entire amount mentioned in the policy without any tax. The family that receives that sum can thus use it all without any issues. Such an arrangement will give them great financial peace of mind.
3.Life insurance is also necessary for stay-at-home parents.
Many people think that life insurance is necessary only for earners. But that is not the correct understanding. Even though they do not earn income directly from the house, the parents who are there make a huge contribution to the family.
Taking care of the children, taking care of their education expenses, doing daily chores, etc. are all great support for the family. If something happens to such parents, the family will have a huge burden to fulfill those responsibilities. Then having life insurance will be a great security to meet the child care expenses, education expenses, and daily living expenses.
Conclusion
Life insurance is a financial security tool that everyone needs. It has been an excellent method of providing financial security for the family since ancient times. Life insurance can be a great support to prevent the family from facing sudden financial burdens after the death of a person. Everyone should think about life insurance and take it so that the family is safe in unexpected situations.