Purchasing a life insurance is possibly the main monetary choices, but believe it or not, only 10 percent of Indians are insured. Be that as it may, for what reason is it so significant? Well, no matter how much you earn, no one knows what the future holds. Many people die prematurely every year due to the illness or accident and if you are the sole breadwinner in the family and you die, it can have devastating consequences for your loved ones-household expenses, their ability to pay off debts and maintain their living standards.
The least you can do is to secure your family’s monetary future by purchasing a life insurance policy. In addition, don’t neglect advantages of a life insurance during your lifetime, particularly in case you are youthful. We listed some of the 10 convincing explanations behind purchasing an extra security strategy or life insurance policy. Let’s see all of them.
8 Reasons You Need to Buy Life Insurance Policy
1. Looking After Your Loved Ones Even After You Are Gone:
You buy life insurance because it is the best way to protect your loved ones. It’s kind of financial decision. This is an emotional decision. As well as it’s surely best about love, care and the future. This is one of the most important aspects of life insurance that one neccesities to factor in. Even after you leave, your family depends on you and you do not want to disappoint them. Replacing lost income, paying for your child’s education or ensuring your spouse gets the financial security he or she needs, life insurance can save days for your surviving dependents.
2. Dealing With DEBT:
You do not want your family to have to deal with financial difficulties in times of crisis. Any home loan, auto loan, personal loan or credit card loan will be taken care of if you buy the right life insurance policy.
3. Life Insurance Supplements Your Retirement Goals:
Who would not love to survive until they save their retirement? With a life insurance plan, you can ensure a regular flow of income every month. Putting money into an annuity is like a pension plan- invest some money in a life insurance product regularly and earn a steady income every month even after retirement.
4. Helps Achieve Long-Term Goals:
Since it is an instrument that keeps you invested for the long term, it would help you achieve your long-term goals such as buying a home or planning your retirement. It also provides you with diverse investment options that come along with different types of policies. Some policies are tied to certain investment products that pay dividends based on their performance. If you are opting for an investment-linked policy, be sure to read the fine print to be fully aware of the potential risks and returns.
5. Your Business Is Also Taken Care Of:
Life insurance is not just for you and your family, but some insurance policies take care of your business as well. If you have a business, your business partner can buy any part of your business without difficulty. Your business partner will make a purchase-sale agreement and the payment will go to the nominees of the deceased partner, but without giving them a share in the company. Basically, there are two types of life insurance policies, one is a term insurance policy and other is a life insurance policy.
Term insurance provides protection for a specific period (10, 20 or 30 years) and offers benefits only if you die during the term. The policy will expire and the coverage will end when you end your policy. An investment-cum-protection plan, on the other hand, pays you a lump sum at the end of the policy term. These plans also give you protection but the cover is usually not much higher than the term plan.
6. Buying Insurance Is Cheaper When You Are Younger:
Not every millennium needs a life insurance policy. Insurance should not be a priority if you have not created an emergency fund or you are still living on your parents’ money.
However, if you have dependents or you have co-signed with your parents (or other family member or friend), be it a student loan or a home loan, you need to start thinking about buying life insurance. Policy. In addition, the cost of coverage is much lower when you are unmarried. Insurance agents can try to sell policies that you do not need.
So, do your best or consult a financial planner to determine how much insurance you need considering other assets you own. Even if you are unmarried, others may be dependent and you need to make sure you take care of them. Disability is another reason when you consider life insurance.
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7. Tax-Saving Purpose:
Regardless of which plan you buy, you can save tax with insurance policies. The premium you pay on the insurance policy is eligible for a maximum tax benefit of Rs 1.5 lakh under section 80C and for death / maturity tax-free tax under section 10 (d) of the Income-tax Act, 1961.
8. A Tool For Forced Savings:
If you choose a traditional or unit-preferred policy, you pay a monthly premium, which is higher than the cost of insuring you. This extra money is invested a little and it adds cash value. This cash can then be borrowed against the policy or you can choose to sell it or withdraw income from it.