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Your Insurance Can Help When You are in Need of Money

Many people think of life insurance as a necessary expenditure and only a few realise that it can also be a great investment. The investment can be used when you are in need of exigency funds.

For example, did you know that you can take a loan against policy and use the money to meet an expenditure that you are unable to meet with your regular income!

Loan against policy

Let us educate you on how using the money from your life insurance makes it an investment you can dip into the funds to meet your needs:

Surrendering the policy – Many insurance companies will offer you the option of surrendering your policy. This basically means that you can empty your cash accumulation account and use it as per your requirement. Just understand the fine print before taking the decision.

Loan Against Your Policy – Every year you pay a certain amount of money to your insurance company to keep your policy active. But, the truth is that, as a policyholder, you can take a loan against your cash accumulation amount. The biggest advantage is a tax deference wherein the money is not taxed as income.

Lowered rate of interest – Taking an unsecured loan means that you are paying a higher rate of interest. However, for a loan against your insurance policy, you will have to pay a lower rate of interest, which makes it affordable. Your lender may also offer you the option of paying only the EMI and deducting the principal amount from your policy amount at the end of the tenor.

To wrap up, all the above reasons should be enough to convince you that your policy is one of the best investment options. It offers you protection in various forms, but most importantly, as a backup when you are in dire need of money.
 

To know more about the loan against policy, click here: How your Life Insurance can Also be an Investment

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