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Life insurance is an essential aspect of financial planning that provides financial security to your loved ones in case of your untimely demise. It is a contract between the policyholder and the insurance company, wherein the policyholder’s life is covered against any kind of mishap that may result in their untimely death ¹.

In India, life insurance has become increasingly important, especially during the COVID-19 pandemic. According to the Economic Survey 2021-2022, the life insurance penetration rate in India rose from 2.82% in 2019 to 3.2% in 2020 ¹.

Apart from providing financial security to your family, life insurance also plays a crucial role in the economy and society. Insurance companies help pool risk and reduce the impact of large losses on firms and households, which has a beneficial impact on output, investment, innovation, and competition ². Life insurance companies can also contribute to the provision of long-term finance and more effective risk management ².

In addition to these benefits, life insurance policies offer tax benefits under Section 80C and Section 10(10D) of the Income Tax Act, 1961 ¹.

Overall, life insurance is an important aspect of financial planning that provides financial security to your loved ones while also contributing to the economy and society as a whole.

Learn more:

1. forbes.com2. blogs.worldbank.org3. weste