Life insurance is one of the most significant financial investments accessible today, yet only a small portion of the Indian population understands its benefits. Its significance stems from the fact that it understands that life is unpredictable and that a premature death caused by disease or accident not only affects the family emotionally but also financially. If the deceased person is the family’s lone breadwinner or contributes substantially to the household income, life for the surviving family members might be especially difficult.
If you haven’t already, read on to learn about four important reasons why you must get a life insurance policy.
1. Financial security for those you leave behind
One of the most significant aspects of life insurance is that it helps you pay for individuals who are financially dependent on you when you pass away. Your family may be reliant on what you leave behind for them even after you die. An unexpected death could leave them stranded and unable to meet their basic needs. This is especially true in the case of families with only one breadwinner. Life insurance gives much-needed steadiness throughout the uncertain times that death may bring.
2. Life insurance helps tackle debt
If you die with active debts attached to your name, your family will be liable for paying back the loans. You wouldn’t want to put a financial strain on your family, and you certainly wouldn’t want them to cope with outstanding loans. Debts relating to your house, vehicle, credit cards, or a personal loan can be paid off with the claim amount obtained from the life insurance company in the event of your death if you have the correct life insurance plan issued in your name.
If you take out an investment related insurance plan and live to see the end of the policy term, you can utilize the maturity amount to pay off debt and liabilities.
3. Helps Finance Long-Term Goals
Investing in long-term goals such as a payment for a house, college tuition for your children, or a comfortable retirement is possible with the help of life insurance plans. The flexibility of life insurance investment plans allows you to diversify your assets across a variety of investment vehicles. Prior to making an investment in a life insurance policy with an investment component, it’s critical to do your homework and read the tiny print to understand the potential rewards and investment risks.
4. Retirement planning with life insurance
When you retire, you’ll still have a steady flow of money coming in every month thanks to an annuity. This is critical since, once you retire, you no longer receive a monthly salary and must continue to budget for living expenditures. To ensure a steady stream of payments, clients can lock in annuity rates today. As a result, your retirement income is protected from market-related volatility.
In addition to providing you with many benefits, life insurance helps protect your beneficiaries in the event that you are no longer able to financially care for them.