Why Should You Avail a Life Insurance Policy?

People who are financially responsible for their loved ones would do everything in their power to provide them with a better lifestyle. Even after their death, they ensure the financial security of their family and dependents by purchasing the right insurance policy. However, more advantages of a life insurance policy can be availed while the life assured is alive.

Read on to know about some reasons you should have to purchase a life insurance policy.

Why Should You Avail a Life Insurance Policy?

Here are some reasons that will convince you to buy a life insurance policy.

1. To Ensure the Financial Security of Your Loved Ones

A life insurance policy acts as a financial safety net for the loved ones of the life assured in the face of an unforeseen event. Hence, it is advisable to purchase the right plan to ensure the continuity of a comfortable lifestyle for your dependents and family after you. 

2. To Repay Debt

Life insurance helps pay for debt and loans through death benefits if the policyholder dies before the repayment, which spares the family from the consequent financial strain. Hence, it is advisable to choose a plan after considering these obligations in the sum assured and policy tenure during your life insurance policy inception.  

3. To Save Taxes

Tax benefits on the premium paid can be availed by the life assured under Section 80C of the Income Tax Act. Under this, the maximum amount of Rs. 1.5 Lakh can be saved each year. Another benefit of tax exemption is provided under Section 10 (10D) of the Income Tax Act on the death benefit offered to the nominee after the life assured's death. 

4. To Achieve Your Future Goals

You can fulfil your future or long-term goals like purchasing a new house through policies like ULIPs, which offer twofold benefits of life cover and investment. The returns on these investments help in achieving the future aspirations of the policyholder.

5. To Plan for Your Retirement

Under the retirement plan offered by the insurance providers, the life assured can enjoy a monthly income replaced by pensions even after their retirement. These help in income generation so that you do not have to depend on your children, friends or relatives after retirement. 

6. To Support Your Children

The life assured can purchase a child's insurance policies to ensure the financial protection of their child's future. The plan can be purchased during the child's birth, and the money can be withdrawn when he/she becomes an adult. Moreover, there are provisions when the cash can be withdrawn during special occasions like higher education, marriage etc.

8. To Ensure Financial Security Against a Critical Illness

You are more likely to get diagnosed with a disease if you have a family history of the illness. Hence, it would help if you prepared for your family's financial protection beforehand as the high expenses can leave them financially burdened. So, you can purchase additional rider benefits of critical illness cover on the life insurance policy, which would help pay hospitalization bills, medical treatment, and post-hospitalization costs and care.

9. To Get Accidental Benefits

Accidents like fires, stampedes, car crashes etc., can never be predicted. It is advisable to purchase a death cover rider with additional accident cover that would help cover the incidental costs if the policyholder dies in an accident.

Takeaway

Purchasing a life insurance policy is an excellent financial decision that should be taken when you start earning stable income to get higher coverage at a low premium rate. You can consult a financial advisor or an insurance agent to choose the right life insurance policy according to your needs.