People generally ignore buying a life insurance policy because they believe it is not required. But a mishap or sudden accident can take the lives of the people. What would happen after that? If that person is the only earning member of the family, managing rents, loans, child expenses, EMIs, etc. would be extremely difficult for the other members without a stable source of income.
Critical illnesses, medical conditions, road accidents, etc. can claim your life or leave you with permanent disabilities. Road traffic injuries affect the lives of up to 50 million people each year and result in approximately 1.35 million deaths. This is why planning for an uncertain future is advisable.
Advantages Of Buying Life Insurance Policy
Apart from securing your family’s financial future, life insurance also offers tax benefit. The death benefit (insured amount) to be paid to an insurer’s family is generally tax-free. Even if the insurer survives, the maturity benefit offered is tax-free to some extent. The benefits of such policies are –
- Helps In Managing Debt – You may have a house loan or a car loan on your head. If anything happens to you unexpectedly, your family would have to bear the burden of your loan. However, if you have invested in an insurance policy, the amount your beneficiary will receive from the insurance payment could be utilized for paying the loan.
- Peace Of Mind – When you hear the news of a relative or acquaintance dying suddenly due to an illness or accident, you may get worried thinking about what would happen if something of that sort happens to you. As a sole bread-winner, it is your responsibility to provide for your kids and family but in your absence, they would have to struggle and compromise on their living standard to save money. These thoughts can be stressful. However, if you have bought a policy, you can be completely stress-free about your family’s financial future.
- Monthly Payment – You can choose whether you want your family to receive monthly payments or a lump sum amount after the policy matures. If you go for monthly payments, your dependents would get a fixed amount each month, which can be used to pay for electricity bills, loans, rents, tuition fees, and other monthly expenditures. This income would compensate for the finances that would discontinue if the earning member dies.
- Various Choices – Life insurance policy is of several types, such as whole life policy, term life policy, etc. and even within those types, there are numerous choices. So, you can buy a policy according to your need as well as for a specific time period. You can even buy insurance without any term or time period. There are policies with decreasing premium amount as well.
The Bottom Line
A life insurance policy has become an essential investment in the current time as it offers numerous benefits. The biggest advantage of buying a policy is that it offers financial protection and security to the people who are dependent on your income.