Investing in life insurance is one of the most vital financial decisions, but believe it or not, there is only small portion of Indians who have a life insurance. But why is life insurance so important? Irrespective of your earnings, the future is unpredictable, so it is always better to be insured.
The least that can be done is to ensure the family’s financial future by investing in a life insurance. Besides this, it is important to not overlook the benefits of life insurance during a lifetime. Here are some reasons why you need to buy a life insurance policy.
Reasons Why You Need a Life Insurance Policy
Securing your family’s future:
Your family members do not depend on you in your presence, but they also depend on you even after you are gone. Be it in terms of the replacement of lost income, paying for the education of children and ensuring financial security for your spouse, life insurance ensures all of this and peace of mind for your dependents.
Debt Dealing:
If you wish for your family to deal with financial liabilities well at the time of a crisis, life insurance is a must. Any type of outstanding debt, be it a loan on credit card will be taken care of with the sum assured offered by the insurance policy.
Helps Achieve Long-term Goals:
Life insurance is an instrument that helps you stay invested on a long-term basis. Apart from the death benefit, it ultimately helps achieve your long-term goals by offering a survival benefit.
Buying Insurance is More Affordable When you are Young:
Not every millennial might not require a life insurance policy. However, if you have co-signed a loan with your parents (or any other member of your family or friend) or have dependents, be it a student loan or a home loan, you must consider a life insurance policy.
You can therefore choose to approach a financial planner to determine how much insurance you require, along with the other assets you own.
You Get Additional Benefits with the Help of Riders
Even though riders are not an essential purchase, it’s highly recommended that you buy them on top of your life insurance policy. Riders act as add-ons that extend your range of benefits. Even though riders differ by the insurance companies, some of the most common riders available are Critical Illness and Disability Rider, waiver of premium, Return of premium, to name a few.
These riders do not come with the insurance policy. You need to buy them additionally against a premium. However, the premium of these riders is minimal as compared to the benefits they offer.
Save on taxes:
If you wish to save taxes, you can do so with a life insurance policy. The premium you pay on insurance is eligible for the tax benefit of INR 1.5 Lakhs u/s 80C of the Income Tax Act.
A life insurance policy tends to run on uncertainties. If you think you are healthy and don’t need a life insurance policy right now, you are mistaken. Even though you are well now and paying insurance premiums at this point of time may burden you, but if suddenly you fall ill at a later stage in life, you may not be allowed buy life insurance at all. So, invest today!
On a Parting Note,
Life insurance is a great tool that assures financial security and protection to the buyer. It ultimately helps create good corpus. However, it is imperative to keep in mind that life insurance differs at different stages of life, based on financial dependencies and obligations. So, it’s essential to buy life insurance carefully. Think through before investing.