Why do people buy life insurance? One of my friend asked me this question recently and in context of that I have prepared a detailed article on why is life insurance important. At some point of our life or the other, we have all been approached by an insurance agent who wanted to sell us an insurance policy. Many of us have often treated this as an unwelcome nuisance, often ignoring how essential a good insurance policy is. Let us explore the reasons why insurance policies are indispensable.
Life insurance is an effective means by which one can safeguard oneself against the unpredictable circumstances one might face in life. It is also a means by which one can protect their dependents and loved ones if something untoward were to happen. However, the reasons why life insurance is a necessity for everyone is not adequately known to many people.
On one hand, people in their twenties might feel that life insurance is not a mandatory requirement, people on the wrong side of their fifties find it difficult to buy insurance. Either the policy turns out to be too expensive or does not provide adequate coverage. Thus, it is never too early to buy insurance. Here are 9 reasons why you should buy a life insurance right now.
1. To provide for your family in case something were to happen to you
It is true that a monetary sum can never be enough to compensate for the loss of a life. However, knowing that there is an adequate source of funds to cover the necessary expenses of your family in case the untoward were to happen is an immense source of mental peace. And guess what, more often than not reduced mental stress translates to a longer and happier life.
2. To make sure that your child receives the education they deserve for a bright career
We all can unanimously agree that the cost of education is increasing exponentially every passing day. Thus to know that your child’s future needs are covered in case something unfortunate were to happen is bound to reduce your worries. Thus, with a proper life insurance policy in place you are one step closer to ensuring a bright promising future for your child.
3. To make sure that there remains a steady source of income in case of an accident or serious injury
Most life insurance policies provide an accidental coverage. Thus, you can rest easy that there will be a steady source of funds in case some permanent ailment or disability were to unfortunately cross your path. It is rightly said after all, a stitch in time saves nine.
4. Life insurance policies double as a source of saving for the future
At the end of the insurance term, the maturity amount returned to you is considerable. Hence, life insurance policies also provide you with a low-risk way of saving up for the future while making sure that you have safeguarded yourself and your loved ones from the fallouts of any unpredictable and unfortunate event.
5. It is cheaper to buy insurance while you are young
As we have stated at the beginning of the article, it is never too early to buy an insurance. In fact, insurance policies get more expensive and more limited in their coverage as the consumer grows older. As the consumer grows older, several ailments also start kicking in which might not be covered by a majority of life insurance policies. Thus, there is no reason to delay buying a life insurance. Buy one well suited to your needs as early as possible.
6. Buying an insurance policy early in your life also makes sure that your money stays invested for a longer period of time
We all know that the longer a sum of money stays invested, the more is the opportunity of wealth multiplication. Thus buying insurance policies early not only ensures that you get them cheap and ensures adequate coverage, but also provides an effective way to augment your retirement plans.
7. Life insurance ensures that you have peace of mind
Death is inevitable for each and every one of us. A proper life insurance policy ensures that our financial commitments are taken care of even in our absence. Knowing this fact can alleviate huge amounts of mental stress. In today’s day and age where every knock on the brick contributes towards building stress in our lives, anything that promises to alleviate it should be welcomed with open arms.
8. Life insurance policies take care of your debts even in your absence
A proper insurance policy ensures that you do not leave your loved ones back with no source of income and a huge burden of debts. An insurance policy is capable of taking care of all your financial burdens and commitments in the event of your absence.
9. Insurance policies are also eligible for tax exemption
Apart from being a huge source of mental peace, life insurance policies are effective tax exemption instruments as well. Under the Income Tax Act of India, life insurance premiums are eligible for tax benefits up to a maximum cap amount per year. Thus, with a proper life insurance policy in place, you can save on your taxes as well. These are adequately strong reasons for investing in a life insurance policy right now.
A number of life insurance providers sell insurance policies in the market today. It is of utmost importance that you choose a reliable vendor who provides a policy best suited for your needs. A good policy will have reasonable premium amounts, transparent terms and conditions and the flexibility to choose how you pay your premium. There also is the option to choose term insurance plans which have become popular in recent years.
Thus, it can be concluded that a life insurance policy offers multiple benefits. It provides the insured with mental peace, a proven way to accrue low-risk savings and also a medium by which you can save taxes. Thus, buying a life insurance policy right now is the correct decision. It will ensure that you and your family are prepared for the future.
Author Bio:– Melanie Godinho is a Certified Financial Planner by qualification and content developer by passion. She work in Financial Hospital She holds expertise in Tax planning and Financial Planning. Follow her on FaceBook