Life Insurance is a mutual contract between the Insurance company/Government and the policyholder. In the contract, it states that if something happens to the policyholder, the insurance company guarantees to give compensation for loss of life in return for a specified premium. In Life Insurance, the beneficiary whose name has been mentioned in the contract will avail the specified sum from the insurer.
Besides the financial protection, various people get allured to life insurance because as per Section 10 (10D) & Section 80C of the Income Tax Act, 1961, it is eligible to get tax deductions. Along with tax benefits, there are various benefits of opting for life insurance. It provides risk coverage, it comes with various plans to suit varied individuals, covers for health expenses, promote savings that help in wealth creation, it guarantees to give the sum assured amount that's payable if something happens to the policyholder, and some insurance firms provide loan facilities to the insured.