Life is unpredictable. Death is the most horrifying aspect of life yet the most indispensable one too. While you can do your bit and stay safe, an unfortunate event can strike at any point. The only real way to stay protected is to buy life insurance. A life insurance plan promises to pay a sum assured to your family members if you die unexpectedly. This is a huge advantage that literally allows you to be your family’s care-provider even after your demise.
Reasons that make life insurance vital
Here are some of the main reasons why life insurance is necessary:
· It secures the finances of your loved ones: If you die suddenly, your family has to cope-up with the shock and the trauma. At such a time if they find themselves without a financial backing, things can take a really bad turn. You may be the primary breadwinner of the family. You may also have certain loans to repay and you may have your children’s educational needs to take care of. Have you imagined how your loved ones will cope-up with the finances? To ensure they don’t face any issues and their lives go on as before, you must buy a life insurance plan. The death benefit received from the plan will help them pay the bills, clear the debts and also live a comfortable life.
· Debt management: You buy a house and your whole family moves in. You comfortably pay off the monthly EMIs. But suddenly you die in a road accident. Your wife is then served a notice from the lender asking to clear the home loan. A few days later, your family is evacuated. Sounds terrible? You can prevent this by buying a term life insurance plan. The proceeds from the plan will take care of the debt and your family won’t have to worry about clearing a loan they did not take in the first place.
· Investment along with cover: As we saw from the points mentioned above, life insurance provides a life cover. While that is important, investing your money wisely is vital too. You can buy life insurance products such as ULIPs or endowment plans and invest a part of your money. You can invest as per your risk appetite and get good returns. This is an excellent advantage of life insurance and another reason why life insurance is necessary. Of course, you must remember that investment is not the primary objective of life insurance. It is just an added benefit, albeit a wonderful one!
· Tax-saving tool: You can save tax under Section 80C of the Income Tax Act, if you buy a life insurance policy. Also, under Section 10(D), you can avail tax-free proceeds in case of death of the insured or maturity of the life insurance plan.
· Retirement planning: There is a kind of life insurance that allows you to plan for your retirement. The annuity plans help you build up a corpus over a period of time. At the time of your retirement, you can get the money back in a lump sum or in instalments. This acts as an income replacement and allows you to live life on your own terms, independently. These plans also provide a life cover. So if you die before the plan matures, your nominees get a payout. Planning for your retirement is one of the most important things to do. Start investing in an annuity plan right away.
The bottom line
There are many reasons why you need life insurance. They are all practical and fesable reasons. Life insurance is available in various forms and you must choose a plan that fits your requirements perfectly. A life insurance plan offers many benefits, but most importantly, it buys you a lot of mental peace. So keep all the excuses aside and get a good life insurance policy if you haven’t done so already.