5 Things to keep in Mind to Invest Money in Life Insurance

Posted by Ariana Smith on March 29th, 2019

“Afraid of dying because of your family? Get life insurance!” – Anonymous

You must have heard about these terms when an insurance agent drops at your doorstep. Life insurance is surely a great thing. It ensures the security of your life, it allows you to do some savings in case of an emergency, and not only that, but life insurance policies also help you in paying less tax.

Life insurance is so important that every alternate person has some kind of life insurance to their savings. However, you’ve got to learn some of the things while you invest money your life insurance premium.

Advance payment has to be paid

According to IRDA, this is one of the standard rules of every finance company, which says that the first premium of the life insurance has to be paid in advance. Although it can be paid via cash up to 50,000 rupees, there are other digital methods to make payments

Level premium is different from extra premium

Level premium happens when the amount of premium charged under a policy do not change throughout the contract. Extra premium is the amount which is charged because of the additional insurance covers which are bought along with the main policy.

So, if you think that the amount you were paying until now has increased, please consult your financial advisor and know about the rules and regulations of the policy. Also, go through your policy in case of any kind of add-ons.

You can also get the rebate for online payment

According to many finance blogs, some insurance companies provide you with a special rebate if you make an online payment. Nowadays, with the advent of online transactions, several insurance companies have struggled to cope up with this technological advancement.

Therefore, they have included some good ways of online transactions like debit card/credit card, net banking, BHIM, and other ways in which you can make quick payment of your life insurance premium, and they are also giving special rebate so that you do not have to think twice paying the premium amount.

You get tax benefits for paying your life insurance premium

The taxable income will be deducted for those who have life insurance for them or their children or their spouse. This statement is under Section 80C of the Income Tax Act. Therefore, if you paying your life insurance premium, you have the right to pay deducted money to the income tax, under their rules and regulation. To avail this discount, you need to show your insurance policies in your annual income tax file.

Pay your premium and pay it timely

Some insurance companies are very strict regarding the payment of the premium. There is a rule in some companies that if you fail to pay even one premium then your policy will be considered as lapsed.

However, there are companies which also offer you a grace period, but in that case, your premium amount may increase, or you can also be charged with extra premium. Some companies allow late payment but it comes with an amount of late fee.

Invest money wisely, and pay your premiums timely to live a happy and secure life!