Buying life insurance will be one of the most crucial financial decisions for you. However, despite its importance, only 3.71% of Indians are currently insured. But why is it so crucial to buy life insurance? In this article, we will discuss why life insurance is so important and why you need to get one today.
Did you know that a lot of people in India die every year due to critical illnesses, accidents, etc. If you are a breadwinner of the family, imagine the financial gap you will leave behind if you pass away. It will not only be a human loss to your loved ones but also a financial one. Therefore, the least one can do is secure their family against such uncertainties and buy a life insurance policy.
1. Takes Care Of Your Loved Ones In Your Absence
This is one of the most important things about life insurance, it helps you protect your family against an uncertain life, in case something happens to you. Your loved ones depend on you, even when you are gone.
When you have a policy in your name, your family will receive the death benefit upon your untimely demise that can be used to replace the lost income, pay for your child’s education, and make sure they are able to sustain a lifestyle that you gave to them.
For individuals seeking a comprehensive understanding of insurance options, it’s essential to explore various types such as life insurance, and also consider questions like ‘is income protection necessary‘?
2. Pay Off The Debts
It is very easy to buy life insurance online these days. You can compare policies, calculate the accurate coverage amount and give your family a lifetime of financial peace. This is especially important because when you are gone, they may have to deal with financial liabilities that you left behind.
All outstanding loans, such as home loan, education loan, or car loan, can be paid with the help of death benefit if you invested in an insurance policy at the right time.
3. Achieve Long-Term Goals
Life insurance is a long-term financial commitment that helps you fulfil your future goals, such as retirement, buying a home, paying for your child’s education abroad, etc. There are many investment-linked life insurance products that pay dividends as per their performance in the market.
However, if you choose to buy a policy that is linked to investment, be sure to read the fine print and educate yourself about the risks and rewards.
4. Helps You Plan For Retirement
There are different types of insurance policy that allow you to secure your future. For instance, you can invest in a life insurance plan at a young age and set aside some money that will pay for your retirement when you no longer have a job.
5. Buy Insurance When You Are Younger
When you are in your 20s, life insurance policies may seem like an unnecessary expense. However, this is when your premiums are the lowest and capable of providing you with expansive coverage at an affordable price. But before you invest in a life insurance plan, you need to determine how much insurance you are going to need.
f you have dependents, you must account for their needs as well. That is why it is better to start early, especially if you are young, healthy, and have nothing critical in your medical history.
The best thing about investing in life insurance online is that you become eligible for tax savings under section 80C of the Income Tax Act. You can also enjoy tax-free proceeds on your maturity or death benefit u/s 10(D) of the Income Tax Act, 1961.
7. Encourages Savings
When you choose a unit-linked insurance policy (ULIP), you need to pay a premium every month. One part of that premium is invested in your life insurance, and the other part goes towards a debt-equity portfolio that accrues cash value over a period of time. You can either borrow against the policy to pay for financial emergencies or sell/draw income from it!
8. Sooner Is Better Than Later
Life insurance plans are meant to protect against uncertainties. While you may be healthy today, you don’t know what will happen tomorrow. If you ever get diagnosed with a serious illness later in life, you may not be eligible for a life insurance policy anymore.
Therefore, buying it now is better than ever to make the most of its benefits. Moreover, you may also be able to attach rider options to your insurance plan to extend its coverage.
The riders can make a simple term plan more comprehensive. For instance, you can get a critical illness rider that will protect you from unexpected treatment expense of a number of lifestyle disorders.
9. Peace Of Mind
While death is inevitable, it is possible to make it less painful for your family members by doing your part today. You can invest in a life insurance policy and secure their financial future. You can start with a small policy and then gradually expand your coverage as your income increases.
You need to add life insurance for not just the tax benefits but also to protect your family against life’s uncertainties. As mentioned earlier, a relatively fewer number of individuals are insured in the country. Thus, companies are leveraging digital mediums to make the process of buying insurance online more accessible and more manageable. Just browse the websites of dependable insurers, and look for products that offer you maximum coverage at an affordable price.
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