What Financial Objectives Can You Satisfy With A Life Insurance Policy?

A life insurance policy is a saviour, whether you are an individual who is planning to buy your dream home or a couple who wants to provide an advanced, quality lifestyle to their children. Though we envision our long-term financial goals, we often resist working toward them due to undefined reasons. Agreed? Planning will remain just a wish if we don’t make any strategies to implement our plans. Therefore, a term insurance policy is a great tool to satisfy all your long-term financial objectives. Read on to find out more about life insurance and how it can help you in your financial planning. 

Meaning Of Life Insurance 

A life insurance policy refers to an agreement between an insured and an insurer, where the insurance company agrees to pay a sum assured to the policyholder after a certain duration or upon the demise of the insured. Pure protection and protection & savings are the two basic types of life insurance plans. The insured must have to pay a premium in exchange for a sum assured promised by an insurance company. 

Objectives of Buying a Life Insurance Policy

Here is the list of financial objectives that can be satisfied with a life insurance policy. 

• Substitute of Income: 

If the sole breadwinner of the family loses their job due to any reason, including an injury, personal accident, or job loss, an insurance company will take care of you and your dependents. Thus, your income will be replaced by the sum assured received by the insurer, keeping you stress-free during your tough time. 

• Payout Loans and Debts:

After your demise, your outstanding loans and EMIs may financially burden your loved ones. As a result, if you have any outstanding loans, such as mortgages or credit card bills, the insurance company will pay off all your debts from your life insurance policy. 

• Support Child Education: 

As a parent, you must stress the education of your children. Isn’t it? Considering inflation and other aspects that can hit your child’s education, it is crucial that you buy a life insurance policy. It will cover their school fees along with other milestones, including marriage or travelling outside the country for education. 

• Satisfy Long-term Goals:

You can save your hard-earned money for wealth creation. If you want to buy a property or any other asset, then this amazing insurance product will become a money bank for you. Apart from this, you can save your money to enjoy a healthy and prosperous lifestyle at the golden stage of your life. 

• Tax Benefits:

An individual is liable to pay income tax once they start earning up to a certain amount set by the government. However, sometimes this tax may burden you while hampering your day-to-day expenses. In this case, life insurance can reduce your taxes and allow you to make better use of your funds. This is because the premium paid on this insurance policy is eligible for tax deductions under Section 80C of the Income Tax Act of 1961. 

• Protection Against Unexpected Events:

Humans have no control over what happens in the future. Therefore, a life insurance policy will safeguard you and your loved ones in case of any unfortunate event. There are additional riders provided by the insurance companies through which you can extend the coverage of your policy. 

Conclusion

Goals with large visions require a corpus of wealth. As a result, a life insurance policy is the best financial savings and protection asset that will protect you at every stage of your life. The insurance companies provide complete authority to the policyholders to plan their future according to their needs. In simple terms, you can customize your insurance plans by choosing and adding various riders to your policy. Any individual, child, or senior citizen can buy life insurance policies after comparing different insurance companies on the basis of customer support and claim settlement ratio.

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