7 Unexpected Uses for Life Insurance Policies

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Every adult is concerned about the future and his progeny which is why s/he buys a life insurance policy made. There are many companies nowadays that offer life insurance as term covers and endowment policies. A life insurance policy, unlike money back policy is meant to keep the future of your family secure once you are gone. 
There are many uses for a life insurance policy, but the top 7 ones are discussed below:

1. Securing the future of your children- One never knows when death strikes. It may be a slow killing disease or something as sudden as a car crash. Since death is finality, it is better to stay prepared to deal with it. A life insurance policy pays the amount deposited by you through periodic premium payments which would be bequeathed to your children if you have nominated them for the money. It could be used to spend on their education and other pursuits, which you would have funded otherwise.
2. Creating a source of income for your spouse -This is mainly true in the case of a man, although it may be true for women too. A lot of wives in India are housewives who depend solely on the source of their husband’s income to make ends meet. An insurance policy would help them cope with the loss of their spouse without having to take on the financial burdens. The money can be put to better use such as a perpetuity policy which would provide steady streams of income every month for the spouse to make ends meet. 
3. Paying Off Debts - Most of us buy property and other assets by borrowing money from the bank or other financial institutions. Untimely death may lead to an abruption in the regular payment of equated monthly instalments which may upset the terms of the loan. The money received from the life insurance policy can help your spouse pay off the loans that you had taken for buying assets for your family.
4. Tax Benefits Available on Life Insurance Policies - Even though life insurance policies are meant to provide after death benefits, they can also be beneficial in terms of tax benefits. The premium that you pay for your life insurance is deductible from your gross income under Section 80C while the maturity amount enjoys tax bereft income on maturity under Sec 10(10D).
5. Use as Collateral - If you are planning to buy a new house and need collateral for taking out a mortgage, then a life insurance policy can be quite useful as banks accept them as collateral. Depending on the final value at maturity, the loan sanctioned for you will be determined.
6. Income stream after retirement - Depending on the policy you buy, you can get income streams as pension right after the age of 55. The pension schemes should be started early in life so that you can pay relatively smaller amounts as premium and for a longer period to accumulate the corpus. The stream of income would continue till death and the maturity amount shall be bequeathed to the beneficiary.
7. Money back policies for other expenses -You may want to take a long holiday with your family or pay for your child’s college education. A money back policy is a good idea if you want a lump sum after every five to ten years. It would help to offset the financial burden you recur after an event.