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Why life insurance is important?
An important part of an individual's investment portfolio is life insurance, not necessarily to accumulate wealth, but to feel financially secure. Other than this, life insurance policy also gives an opportunity to enjoy benefits of tax-deduction options, and in some cases long term capital gains.

The important thing to remember while opting for a policy is the term and plan related to that particular policy. Remember that Life Insurance is primarily made keeping your family and those who are dependent on you in mind. One should not fall for a wrong deal while going for a Life Insurance policy as there are various companies that would ask to opt for a policy from them.

When you decide to invest in Life Insurance, it is imperative that you understand your financial status, your future liabilities and commitments and then opt for a policy which suits you in longer term. There are many important factors that an individual needs to understand prior to opting for Life Insurance Policies like: Requirements, term (duration) and premium to be paid; Nature and benefits of the policy in the longer run; Coverage of the policy etc.

Before going for the policy, the insured person should also think about the benefits that he and / or his nominee will receive, as one knows life insurance covers the risks of loss due to the death of the insurer. So it is advisable that before you purchase the policy; take a look at the plan of the policy in detail. Analyzing the different categories of insurance, conducting a proper market research, checking your financial constraints where you ensure that you pay your insurance premiums simultaneously is important. Ideally all life insurance companies invest the insurance premium funds in the various types of projects meant for developments and attractive returns like from government funded bonds to private companies.

There are many advantages and disadvantages of life insurance. The prime advantage is financial security for the obvious reasons. It helps in reduction of tax payments. Policy holders are entitled to claim income tax exemptions for paying the premiums. The amount and the extent to which they are allowed depends on other factors like the person’s income and if the insurer is a private player or run by the state. Disadvantages include incompetent facilities as all life insurance companies are not able to provide the exact kind of life insurance policy as desired by consumers.

Moreover, the services of insurance agents could sometimes do more bad than good as some of the agents try to convince their clients to invest more or choose certain policies which are not much beneficial to the clients. One can find himself in trouble if he invests more than what is actually required.

While opting for life insurance, one should also take a view of life insurance quotes, i.e. the prices at which life insurance policies are proposed to be sold and they vary from company to company or individual to individual, mainly depending on the term of the policy. Other important issues that address the quotes are age and income, the physical features and family details of the insurer.

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