A simple way to bring more certainty into your life is to plan things. While there are many tools and resources you can use to plan your present, when it comes to risk-proofing your future, a life insurance policy is the best option. Life insurance is a crucial tool that provides financial security and peace of mind for you and your family.
Here are 10 reasons to buy life insurance that tell you why buying it should be a key part of your financial planning.
Financial Security for Dependents
A life insurance policy ensures your dependents are financially secure even in your absence. It is a crucial asset for the primary breadwinner. Whether it is covering daily household expenses, school fees, or future life goals, life insurance ensures that your family does not have to face financial vulnerability. This is one of the strongest reasons to have life insurance, especially if you have young children or ageing parents depending on you.
Debt Repayment
Debt obligations do not disappear with a person’s passing. In fact, they become a source of additional stress for surviving family members. Life insurance can help pay off debts such as a home loan, a car loan, or a personal loan and prevent your family from bearing the financial burden in your absence. They can repay any existing liabilities with the payout they receive, without compromising their standard of living. For many families, this alone can be one of the most compelling reasons to buy life insurance.
Wealth Creation
Some life insurance plans, such as term insurance, keep their features simple, accessible, and focus on protecting your loved ones. However, certain other types of life insurance policies, such as a ULIP (Unit Linked Insurance Plan) let you invest and achieve your long-term financial goals. You can invest in equity, debt, or hybrid funds as per your risk appetite and goals. Another benefit of life insurance of this type is that it ensures financial security for your family in the event of an unfortunate incident. This can help you build wealth over time and create, financial stability while staying covered.
Additional Benefits
One of the main reasons to have life insurance is that you can have additional benefits, in the form of riders attached to your base policy, at a nominal additional cost. You can opt for the accidental death rider which provides an additional payout in case the insured person passes away due to an accident. Or you can opt for the waiver of premium rider which ensures that your plan continues even when you can no longer pay premiums (due to accidents, critical illnesses, etc.). These additions increase your policy’s coverage without the need for a separate plan. Moreover, now you can review these riders on online life insurance portals and check how valuable they are to your plan with just a few clicks!
Retirement Planning
Working professionals planning for their retirement have another reason to buy life insurance. Many insurers now provide pension plans or guaranteed return plans that provide you a steady source of income during retirement along with a life cover. This steady income becomes especially valuable when you consider that your active earnings may stop but expenses, especially those related to health, will likely increase. Hence, a solid pension plan is crucial to ensure a peaceful and stress-free retirement.
Tax Benefits**
One of the key reasons to buy life insurance for many people is the tax advantages it brings. Premiums paid towards life insurance may be eligible for tax deductions under Section 80C of the Income Tax Act, 1961, under the old tax regime. Additionally, the death benefit you may receive after the life insurance claim is made is tax-free under Section 10(10D), subject to terms and conditions.
Critical Illness Coverage
One of the growing reasons to get life insurance today is that it not only offers life protection but also provides health-related coverage in the form of the critical illness (CI) cover. If the insured is diagnosed with a life-threatening medical condition covered under the rider, the insurer makes a lump-sum payout to help the insured deal with the financial consequences of the same.
Peace of Mind
Knowing that your family will be financially secure in your absence, provides immense peace of mind, allowing you to focus on your present without worrying about the future. You can enjoy this peace of mind right away if you decide to buy online life insurance. With most insurers offering digital policies, getting life insurance today is only a matter of a few clicks!
Financial Discipline
Paying regular premiums can help you cultivate a habit of saving in a disciplined manner. This discipline can move to other areas of your life and help you create a stronger, financially secure future in many ways. To ensure discipline and make regular premium payments, consider using a life insurance calculator before you finalise your online life insurance plan.
By using this tool, you can check premium estimates for different plans and choose one that fits your budget.
Legacy Planning
One of the thoughtful reasons to have life insurance is that it helps you leave behind a financial legacy for your loved ones. With the right policy, you can support future generations, donate to a cause, or ensure business continuity.
These top 10 reasons to buy life insurance showcase the varied roles a life insurance policy can play in your financial planning. From protecting your loved ones to helping you save and invest; life insurance serves multiple purposes. So, if you are still undecided, consider these reasons to have life insurance as motivation to secure your future today!
** Tax exemptions are as per applicable tax laws from time to time.
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