Five Reasons Why Life Insurance is Important For All
Life insurance is a vital protection coverage for your loved ones in the event of your untimely death. But apart from providing financial assistance, there are many other reasons why a life insurance policy is important. Read on to know the six reasons why it is paramount for all to invest in a life insurance policy.
Buying a life insurance policy s one of the crucial financial decisions you may take in your lifetime. Research suggests that only about 10% of the Indians have a life cover. If you are wondering why life insurance is important? The answer is because the future is unpredictable. No matter what your current financial status is and how much you earn, it is impossible to predict when a casualty can strike.
Over the past few years, the number of people dying at a young age has increased significantly. If you are the sole earning member of your family and if something were to happen to you, a life insurance policy will help you secure the future of your loved ones and help them meet their financial expenses like debts, paying off the loan and maintain a decent standard of living.
If you have underestimated the importance of life insurance, it would be wise to make sure that you buy a robust life cover for your family and secure their financial future. Let us look at the importance of life insurance.
Meet your family’s needs
One of the most important life insurance benefits is that it helps you secure your family’s financial needs, even when you are not around. If you have a wife and children or parents who are dependent on you, it can be difficult for them to be able to sustain and take care of their expenses in the event of your demise. This is where life insurance plays an important role; the death benefits can help them take care of their regular expenses like child education, pay off a Home Loan, etc. and have the financial stability without having to compromise on their lifestyle.
Protect Your Business
A lot of people have no idea about what does life insurance cover? Apart, from covering your family, there are some life insurance policies that provide coverage to your business. If you are a business owner, and in case if something happens to you, your business partner can purchase a certain portion of your business, and the pay-out will be paid to the nominee. However, you must know that in this arrangement, the nominee will not get any stake in the business.
Settle The Debts
During your active working life, you may avail of a loan to purchase a home, a car, fund your child’s education, or even to repay debts. However, in case you pass away before paying off the loan, the debt will directly fall onto your family members. Even if the dependents are employed, managing the loan can be difficult for them. This is why life insurance is required if you have a life insurance cover; the family can pay off the debt with the sum assured and live a financially independent life.
Support Your Retirement Plan
It is the innate desire for all to have a good retirement fund. You can accomplish this goal by investing in good life insurance plans. There are some life insurance policies that provide regular income on a monthly basis.
Get Tax Benefits
Apart from protection, one of the most significant advantages of life insurance is that it helps you get tax benefits. No matter what type of life insurance policy you buy, you can save taxes. Under Section 80C of the Income Tax Act, the premium paid for life insurance is eligible for deduction up to a maximum amount of Rs 1.5 lakh. Also, the death benefit or maturity is exempted from tax under Section 10(10D).
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