Youngsters think that life insurance is something you do not need to think about. But this is a big myth. This situation is in the whole country where its reach is disappointingly low.
According to a report by IndiaSpend, a data-based journalism initiative, in the event of the death of an earning member, an average Indian may need only 8% to save his family from financial shock. The report released on January 15 stated, “This is significantly lower than the insurance coverage of 67% in Australia, 44% in Japan and 84% in Taiwan.”
In addition, up to 988 million Indians – or 75% of the country’s population and more than Europe’s total population – do not have any form of life insurance according to studies based on government and industry data.
Life insurance is an additional money that is invested to get cash value. Buying life insurance is one of your most important financial decisions, but believe it or not, even today the penetration of life insurance in a large population is hopelessly low. But why is it so important? Many people die prematurely every year from accidental illness or accident, and if you are the only earner in the family and unfortunately you have passed away, it can bring disastrous consequences for your loved ones. Maintain household expenses, education, their ability to pay debts and their standard of living.
You can get the financial security of your family by purchasing a life insurance policy. Also, do not ignore the benefits of life insurance during your lifetime, especially if you are young. We list top compelling reasons to why Life insurance is must.
Top reasons to buy life insurance
To protect loved ones after you’re gone : This is the most important aspect of life insurance that you must consider. Whether it is to replace lost income, pay for your child’s education, or ensure that your spouse gets the much-needed financial security, life insurance can save the day for your remaining dependents in case of you are gone.
Dealing with Debt : You do not want your family to deal with financial liabilities during a crisis. Any outstanding loan — a home loan, auto loan, personal loan, or credit card — will be taken care of if you happen to buy the right life insurance policy.
In achieving Long-term goals : Your insurance premium is invested for the long-term in different instruments such that it will help you achieve your long-term goals such as buying a home, child education or your post retirement life . Insurance offers you range of investment options that come with different types of policies.
Be sure to read Policy wordings to be fully aware of the potential risks and returns before opting for any investment related policy,
Cheaper policy at young age : Having a insurance products at younger age comes with a cheaper price. It may be the case You are single, other may become dependent on You. If You are young, healthy and free from risk factors, You get the insurance at best price . Consider it even you are single.
Saving purpose : If you choose a traditional or unit-liked policy (ULIP), you pay a premium each month, a part of which is invested and it accrues cash value. This accrued cash can then be borrowed against the policy or you can choose to sell it or draw income from it.
Post Retirement Life : Insurance gives you financial protection . With a life insurance plan, you can ensure that you have a regular income every month. Investing money in an annuity is like a pension plan – regularly allocate some money in a life insurance product and enjoy a steady income every month even post retirement.
Tax Benefits : Your insurance policies comes with Tax benefits irrespective of what plan you buy. The premium of policy is eligible for a maximum tax benefit of Rs.1.5 lakh under Section 80C, and for tax-free proceeds on death/maturity under Section 10 (D) of the Income Tax Act, 1961.
May not be qualified for it later in Life : Life insurance coverage run on uncertainties. You may be sound and healthy now and paying a premium for life insurance may seem to be an added financial burden, In this way, it is basic to get one at an early stage in your life since it stays in power if your well being falls apart later on. In case if you suddenly fall ill, you may not be eligible to get a life insurance policy.
Peace of Mind : Life is unpredictable. In the face of tragedy, the least you can do for your family is to secure their financial future. Your insurance policy can to help them tide over difficult times.
Life insurance is a great instrument for both protection as well as help you save in a disciplined manner, creating a good corpus. The need for life insurance changes depending on the financial obligations and dependencies arise in life.