Life insurance: A Smart Investment For Uncertain Times

June 28, 2021

Life insurance is a smart investment option because it helps your family to stay financially secure in your absence or deal with uncertain times. In short, every responsible individual should buy a Life Insurance policy. Let’s get to know more about the policy, in detail.

Savings and investment habits should be inculcated early in life. These are the essential steps for financial planning. When it comes to investments, buying a Life Insurance as an investment is often overlooked by many Indians. Many of us postpone investing in a life cover as it is considered an additional financial liability.

Life insurance plays a crucial role in times of uncertainties. It could be in any form, be it temporary unemployment, accident, medical emergency or times like the ongoing pandemic. Not only do such events affect you but they shake your family members a great deal, both financially and emotionally. To cope with such inevitable incidents, buying a Life Insurance is necessary.

A Life Insurance is a financial plan that helps you deal with human life contingency, such as death, accident, disability or retirement. It assures you monetary assistance to the dependent family members, in case of the death of the policyholder (the only breadwinner), naturally or due to an accident. It is a contract between the policyholder and insurer, where the latter agrees to offer a guaranteed life cover and other benefits, in exchange for premiums paid by the policyholder.

The investment insurance plans can be in Term Insurance, Whole Life Insurance, Endowment Life Insurance policy, Money Back Insurance policy, Retirement Insurance Plans, ULIPs, and Child Insurance Plans.

Experts suggest buying a Life Insurance policy that suits one’s objectives, investment horizon, risk tolerance, among others. Considering these factors, you can find the right one for your requirement. Apart from these, here are some tips for selecting the right type:

  • Consider taking a closer look at the inclusions and exclusions

  • Look for Life Insurance investment plans that will help in securing financial stability and offer maximum financial security to your dependents, when you are no more

  • Also, take into account, goals, expectations and expenses that may crop up in your lifetime.

If you are simply unaware of how to start searching for the right policy, you can consult a financial advisor. This will help you know which is the best type of Life Insurance for you and your family.

Who Neds a Life Insurance?

You should primarily invest in the policy if you are the only breadwinner in the family and your loved ones, such as your child and spouse are dependent on your income.

Why Do You Need a Life Insurance?

  • To ensure that your immediate family members have financial support in the event of your demise

  • To fund your child’s education and other needs

  • To have a savings plan so that it can serve as a source of income at the time of retirement

  • To serve as an emergency fund that you can use for medical or other personal requirements.

Every responsible individual should buy a Life Insurance policy to fulfil the daily expenses in the absence of the breadwinner and provide a financial cushion, to bail the family during exigencies. You need to choose the right life insurance policy that suits your family requirement, budget and risk factor. Later, you can also enhance the policy according to the different life stages of your life.

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