Life Insurance has been with us for a long time now. We are already aware that it acts as a vital protection for our loved ones in case of an untimely death. If you are thinking as to why Life Insurance is important, the answer is simple – Future is Unpredictable.
Ask yourself, “Did we ever thought about going through this phase of Coronavirus before?”
According to Bloomberg, “At least 988 million Indians i.e more than the population of Europe and 75 percent of all Indians are not at all covered by any form of life insurance”
Bloomberg Source (https://www.bloombergquint.com/business/988-million-indians-do-not-have-life-insurance)
Anyone having Financial Dependents should take a Policy. Infact, it also suits those kind of Investors who want to enjoy safe long-term returns along with some tax-saving benefits. You should consider the benefits of Life Insurance even if you are young. The number of young people dying has also increased rapidly over time. Apart from that it also helps you diversify and make long-term investments.
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8 Reasons to Buy a Life Insurance policy:
1. Life Risk Cover & Death Benefit:
It is very important to help your family meet the financial requirements even if you are not there. The cost involved to maintain the standard of life is increasing day by day. You have your parents, wife or children to look after and therefore you should have a backup plan for them if you are not there. Life Insurance Policy plays a very important role here. Your family will be able to meet their daily expenses including children’s education and even pay off loans such as House Loan or any other kind of liability.
2. Protect your Business:
There are certain Policies that help you in protecting your business. Suppose you have a business running and something happens to you. Now, in such a case the loss can be compensated with the help of the policy where the other surviving partner or partners can purchase a certain portion of the business and pay the respective amount to your Nominee. However, no stake will be provided to the Nominee is such a case. In this way, both your family and the business can keep running smoothly.
3. Tax Benefits
Life Insurance Policy gives you Tax benefits as well. You can save Tax up to Rs. 1,50,000 under section 80C of the Income Tax Act. Similarly, the maturity insurance plans can be tax exempt as well as per Section 10(10D) of the Income Tax Act.
4. Return on Investments:
Life Insurance policies give you monetary benefits also along with life cover. In case of ULIPs (Unit Linked Insurance Plans) you also invest in equity market also and get a better return compared to other alternatives. So, in this way you get Life cover as well as Return on Investments.
5. Opting for Riders:
One can also include rider in his/her Life Insurance Policy. Add-ons ranging from Critical Illness to Accidental Total Permanent Disability can help you protect you and your loved ones from financial problems and give you security.
6. Saving for Children:
There are various Children Education Policies available in the market. They help you get a good lumpsum amounts so that you can meet the requirements accordingly. The child will get money from time to time and can easily meet his/her higher education expenses.
People also take Life Insurance Policies to meet their daughter’s marriage expenses. Indian marriage are no less then a grand event and therefore people take money back policies to get a good amount in the nearby future.
7. Retirement Planning:
Life Insurance Policies helps you in Retirement Planning. With increasing day to day expenses it’s very important to plan accordingly and meet your expenses in the later stage of life. Many of us are working in the Private Sector and therefore there are no pension benefits. Life Insurance Policies help you in living your life on your terms. You can analyze and understand your financial expenses post-retirement and buy a Fixed-Pension plan accordingly. You can plan well in advance and beat inflation as well.
8. Loan Options:
You can also take Loans against Life Insurance Policies. This loan amount that can be taken in a percentage of the cash value or sum assured under policy as per the policy provisions.
One should have Life Insurance policies also along with other investments. It minimizes your risk element and acts as a protection tool. You must understand the significance of Life Insurance Policies and plan your financial goals.
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