Finance

Is life insurance a smart buy?

life insurance

Living in uncertain times, having a protecting cover with life insurance has become more essential than ever. Life insurance ensures that in your absence, your loved ones have a financial nest to rely on. It acts as an income replacement for you, so when you are not around, your family’s lifestyle and expenses are not affected. Also, if you have any liabilities, your sum assured will take care of that as well, so your loved ones are not burdened.

If you are still having double thoughts about whether a life insurance policy is worth your money, here are some benefits that a policy can provide-

  • Security
    If your loved ones depend on you financially, your absence may disrupt their monetary condition. With the absence of a source of income, they might find it difficult to meet everyday expenses and might have to give up on their long-term goals. They may even have to blow up all their savings to sustain themselves. Having an income replacement in your absence is a must-have, and this is what life insurance precisely does. In case of your sudden demise, the nominee will receive the sum assured of your life policy. This money will ensure that your family can sustain well in your absence.
  • Debt clearance
    You may have liabilities currently or make take debt in the future to fulfill your financial goals, be it for the education of your child or to buy your dream house. In your presence, you are paying the loans on time. However, if you lose your life suddenly, the pressure to repay your liabilities would be on your family. The situation would take a turn for the worse if you were the primary breadwinner. In your absence, your family may struggle in repaying your debt and would be in financial turmoil. To avoid this situation altogether, life insurance is a needed financial cover. When you buy life insurance, take your family’s living expenses and your liabilities into consideration. Use a life insurance premium calculator to get an estimate of the premiums payable for getting your desired sum assured.
  • Investment
    There are several types of life insurance policies available in the market that cater to the need of different individuals. Depending upon your financial planning and the stage that you are in your life, you can choose the type that you find to be the best. There are some life insurance types which also have an investment component attached, such as a ULIP. These plans are great, as it does not lock all your money in one component. The savings or investment component ensures that you have funds available for your long-term goals.
  • Tax advantages
    When you buy life insurance, you are required to make payments (in the form of premiums) for your life cover. You can choose whether you want to pay monthly or annually as per convenience. These premiums are exempt from taxes under section 80C of the Income Tax Act. Also, the money received from insurance after maturity and the sum assured received after a policyholder’s demise are exempt from taxes too.
  • Emergency help

Let’s not forget the basics. What is life insurance? Coverage for your loved ones in case of your demise. This means that life insurance can come in handy for you during emergencies. There are some life insurance plans which you can keep as collateral to get a loan. For an insurance plan with a savings or investment component, you can choose to get a partial withdrawal. These features of life insurance help immensely during emergencies when urgent funds are needed.

With several types of life insurance available, compare them and choose the one that fits your need. With a correct life policy, you do not have to worry about your family’s future in your absence. You know that your life cover will take care of the financial health of your loved ones. Use a life insurance premium calculator to get an estimate of the premiums of your desired sum assured. The earlier you buy a life policy, the lower your premiums would be, and it would be quite easier to also get a life cover. 

Click to comment

You must be logged in to post a comment Login

Leave a Reply

To Top