Purchasing life insurance is one of the most important financial decisions a person will make in their lifetime. However, why is this the case? It is hard to forecast future events, regardless of your high profits. If you are the sole breadwinner in your family, your death due to an accident, an unforeseen illness, or natural causes might occur at any time, resulting in severe financial consequences.
If you are the only earning member of your family, the family’s income will end when you die. Life insurance can help your surviving dependents in a variety of ways, including replacing lost income, paying for your child’s education, and ensuring your spouse receives much-needed financial security.
A life insurance policy will pay off your outstanding debts, whether they are from a home loan, a personal loan, a car loan, or a credit card loan, relieving your family of the burden of such financial liabilities at a time when they are already dealing with a major crisis.
Some life insurance policies, such as child insurance plans, whole life insurance plans, term life insurance plans, Unit-Linked Insurance Plans (ULIPs), and so on, also assist in achieving long-term goals such as home ownership, child marriage, and so on, by providing a variety of investment options.
Your retirement savings will be protected by a life insurance policy until you pass away. An annuity is similar to a pension plan in that you put money into a life insurance product on a regular basis and receive a monthly income stream as long as you live.
Life insurance policies are also a good way to save taxes. The premium you pay for an insurance policy is deductible under Section 80C, and the proceeds on death/maturity are tax-free under Section 10 (D) of the Income Tax Act of 1961.
Life insurance protects not only your family and loved ones, but it also protects your hard-earned business from financial loss, obligations, and instability in the event of the death of a business owner or partner.
In the event of an emergency, you can not only use your life insurance policy to pay off your existing loan, but you can also use it to secure a new loan. It’s a financial asset that boosts your credit capacity. It also aids in the purchase of health insurance.
Although no amount of money can ever replace you as a person, planning ahead with life insurance can help those left behind deal with the unpleasant difficulties they will face after you pass away.
Given the foregoing facts, it is critical to purchase one when you are young and healthy, because if you suffer a serious sickness later in life, you may not be able to afford one.
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