Why Do You Need to Buy Life Insurance?

In the absence of correct information, the buying process of life insurance can be cumbersome and time-consuming, discouraging people from buying one for themselves. However, the purpose of an insurance policy to ensure your family's financial safety after an unfortunate event should be a big enough reason to buy a life insurance plan immediately. Moreover, purchasing an insurance policy as soon as you start earning a stable income is advisable to get low premium rates and more coverage. 

Read on to know about the common reasons you should have a life insurance policy.

Why Do You Need to Buy Life Insurance?

Here is the list of reasons to convince you to buy suitable life insurance for yourself.

• Financial Security of Your Loved Ones

In our uncertain world, a life insurance policy acts as a financial safeguard for the loved ones of the life assured. Therefore, it is essential to purchase an appropriate plan to ensure a comfortable lifestyle for your dependents and family if anything happens to you. In addition to this, the policy also helps replace the income and provide for your child’s education needs.

• To Fulfil Long-Term Financial Goals

An appropriate life insurance policy will help achieve some long-term goals like purchasing a new house or retirement plans of the life assured. Some policies like ULIPs provide dual benefits of investment and life cover. The returns on these investments also prove to be pretty helpful in fulfilling the long-term goals of life assured. 

• Debt Repayment

The death benefit helps repay various debts, personal loans, home loans and credit card loans etc. Hence, it is advisable to choose an appropriate plan by considering these needs during the policy inception. 

• Tax Saving Benefits 

Under Section 80C of the Income Tax Act, the life assured enjoys tax benefits to the maximum amount of Rs. 1.5 Lakh on the premium payment of different life insurance policies. In addition to this, Section 10(D) of the Income Tax Act provides tax exemption on the death benefits to the beneficiary if the policyholder dies. 

• To Get Help in Running a Business 

Besides providing for your family’s financial requirements, few policies also help the business-related issues of life assured. For example, if the policyholder with a business dies, his business partner will get his/her share without much trouble. Moreover, the payout of the buy-sell agreement between business partners will go to the deceased partner’s beneficiary without any stake in the business. 

• Retirement Planning

The life assured can enjoy a monthly income even after their retirement in the form of pension through some policies. These act as income replacements and allow wealth creation even after the retirement of the life assured.

• Help During an Accident Or When Diagnosed with a Critical Illness 

The rider benefits of the life insurance policies provide financial help during troubling times. For example, you should purchase the critical illness cover if you have a history of family illnesses like kidney damage, cancer, or heart attacks. In addition to this, a death cover rider with additional accident cover would help in covering the accidental costs if the policyholder dies in an accident.

Conclusion

The reasons mentioned above should be acknowledged to get a good idea about different life insurance policies. Moreover, it is advisable to do a thorough and detailed study to purchase the right life insurance plan to gain maximum benefits and secure your family’s future.

Also read 

How Much Term Insurance Cover Do I Need?

Term Insurance vs Life Insurance

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.