Is Life Insurance Right for You? Understanding Its Significance

In a life full of uncertainty, a question might frequently pop up in your mind about whether you should get life insurance. Well, the answer to this question entirely depends on individual preferences. But if you ask us, we suggest getting it if you have dependents who rely on your financial support. Getting life insurance also makes sure that your dependents are protected in case you die unexpectedly. 

So, if you are still confused about whether or not you need life insurance then this article has got you covered. Here, we will take a deep dive into what exactly life insurance is, the reasons that make it important, and how to get one. 

A Closer Look at Life Insurance

Life insurance is a contractual agreement between the policyholder and an insurance company. The insurance company offers financial protection to the policyholder's beneficiaries in case of his/her death. And, all this is provided by the insurance company in exchange for regular premium payments made by the policyholder. 

The main purpose of life insurance is to provide financial security to the policyholder's loved ones after his/her death. The death benefit can then be used by the dependents to cover various expenses, such as funeral costs, mortgage payments, outstanding debts, etc. 

Talking about life insurance policies, they come in various types, including term life insurance, whole life insurance, and universal life insurance. Each type of policy offers unique features and serves different purposes. 

Let's discuss each one of them in brief!

• Term life insurance provides coverage for a specific period of time, say 10, or 20 years, and pays out a death benefit if the policyholder dies during that specified period. 
• Whole life insurance is a permanent policy that covers the policyholder’s entire lifetime and includes a cash value component that can grow over time. 
• Universal life insurance is a flexible policy that allows adjustments to premiums and death benefits.

To select the most suitable life insurance policy, you should consider your financial goals, budget, and the needs of your beneficiaries. Evaluating the life insurance quotes including terms, premiums, and optional add-ons (riders) of different policies is also a must to make an informed decision.

Why Should You Consider Life Insurance Purchase?

Below, we have discussed the top reasons why you should buy life insurance.

1. Provides Financial Security to Your Family

In a world where everything is uncertain, you never know what life holds for you. In case you pass away due to cancer, your family or your dependents might face financial problems and this is where life insurance for cancer patients can help. The payout from your policy can help your family repay all your debts including credit card bills, car loans etc. 

2. Helps in Taking Care of Your Business

If you are a business owner, then you must definitely purchase a term plan. The short-term cover plan involves very low premiums but offers an incredible payout in case anything happens to you. The policy payout can then be used by your business partner to settle all your accounts. 

3. Helps you Save Tax

Another reason to buy life insurance is for tax-saving purposes. One can save taxes with life insurance policies irrespective of which type of plan you purchase. The premium that you generally pay on your insurance policy is eligible for tax benefits and tax-free proceeds under different sections of the Income Tax Act, 1961. 

4. Funeral and Final Expenses

Funerals and related expenses can be quite costly. A life insurance policy can help cover these costs, relieving your family of the financial burden during a difficult time.

5. Legacy Planning

Life insurance can be used as a legacy planning tool. It allows you to leave a legacy or provide an inheritance to your beneficiaries, which can include your children, grandchildren, or a charitable organisation.

6. Peace of Mind

Knowing that your loved ones will be financially protected after your death can provide peace of mind. Life insurance allows you to plan for unexpected situations and ensure that your family's future is secure.

7. Affordability

Life insurance can be surprisingly affordable, especially when purchased at a younger age and in good health. When you're young and healthy, insurance providers generally view you as a lower risk. This means you're less likely to pass away during the policy term, which leads to lower premiums. In other words, the earlier you purchase life insurance, the cheaper it tends to be.

Obtaining Life Insurance: What Else You Need to Know?

Are you wondering about ‘How to Get Life Insurance’? If yes, then we have got an answer for you! 

When it comes to obtaining life insurance, finding the right policy can seem to be pretty challenging. But, by following the below-mentioned steps, you can make the process hassle-free.

Step 1: Decide ‘Do you Need Life Insurance?’

The first and foremost step is to identify if you need life insurance. In case, no one depends on your finances then getting life insurance might not be a good option for you. But in case your death would create financial hardship for your dependents then life insurance is really worth considering. Also, it’s important to note that even if you already have life insurance from your current employer, it’s advisable to get your personal life insurance because the one provided by the employer might not offer sufficient coverage or will become ineffective after you leave your job.

Step 2: Calculate the Coverage You Need

Once you have decided that you need life insurance, the next step involves calculating the amount of coverage you need and can afford. For this, you need to take a closer look at your current investments, debts, income, and other financial assets. Moreover, don’t miss out on considering your future expenses while calculating the required coverage and affordability. 

Step 3: Identify the Right Policy Type 

Due to the availability of different policy types like term life insurance, whole life insurance, etc., identifying the right policy type is a must. If you require life insurance coverage just for a limited period, a term life policy can be a good fit. In contrast, if you wish to have lifetime coverage with an additional benefit of cash value that you can withdraw while you are still alive, a whole life insurance policy will make more sense. 

Step 4: Decide if You Need Insurance Add-Ons

Insurance riders are optional add-ons or supplementary provisions that can be added to your existing insurance policy to change or improve its coverage. By adding riders like critical illness, accidental death, etc, you can modify your insurance coverage to better meet your unique requirements and situation. Although the riders normally incur an additional expense for the policyholder, but they offer coverage alternatives above and beyond the provisions of the policy.

Step 5: Choose the Best Life Insurance Company

After deciding everything, it’s time to buy your life insurance policy. Well, it certainly pays to shop around for the perfect premium and coverage but we at InsuranceDekho have simplified the process for you. Just go to the official website, fill in all the required details, compare multiple life insurance quotes, choose the most suitable insurance provider, and make the payment. That’s all! 

It is this simple to get a life insurance policy with us!

Conclusion

The question of whether you should get life insurance deserves thoughtful consideration, and the answer often comes down to your individual preferences and financial goals. However, the importance of having life insurance cannot be overstated. Life insurance eases the burden of debt, secures the future of your dependents, and grants you peace of mind. Also, its affordability, particularly when purchased early, makes it a wise investment in your family's well-being. So, don’t wait much and get life insurance now. 

Also Read: How to Get Life Insurance Without a Medical Exam?