Buying a life insurance policy for your family is a critical decision. It is vital for protecting your family from the uncertainties of life. However, research indicates a harrowing statistic about life insurance penetration in India; only about 10% of the people have a life insurance cover.
If you are wondering why buying a life insurance cover is critical? The simple is – ‘life is unpredictable.’ Irrespective of your financial status and income level, you would need a robust life insurance cover to protect your family’s financial future in the event of an unexpected event.
If you are the only earning member of the family, and if something unexpected happens to you, a life insurance policy will help the dependents meet their financial expenses and maintain their current lifestyle.
Let us look at five reasons why you must purchase a life insurance plan.
- Protect your family
One of the most significant benefits of life insurance is that it helps you secure your family’s financial future even in your absence. If you have a dependent spouse, parents, and children, it can be challenging for them to sustain the daily expenses if you pass away unexpectedly. The death benefits received from the insurer can help them take care of the expenses like child education, pay off the debts, etc.
- Leave a legacy
If you don’t have any significant assets to pass onto your heir, you can still leave a legacy and inheritance for your family by purchasing a life insurance policy. You can name your family children or spouse as the beneficiary so that they receive the sum assured in case of your demise.
This is an excellent way to secure your loved one’s future, especially for kids and prevent them from facing any monetary hassles.
- Supplement your retirement goal
As a working professional, you may dream about having a fun and financially independent retirement life. And you can accomplish this goal by buying a good life insurance policy with a high sum assured. There are different types of insurance that have savings and investment components wherein you can save a small amount periodically over a period for retirement goals. And, when the policy matures, you get a regular monthly income in the form of a pension.
Thus, it helps you supplement your retirement goals, and you need not dig into your other investments in pension funds for daily expenses.
- Tax benefits
Apart from providing financial protection to your family, a life insurance policy is an excellent tax-saving instrument. Irrespective of the type of life insurance policy you buy, the premium you pay is eligible for tax benefits up to Rs. 1,50,000 under Section 80C of the Indian Income Tax Act. Also, the benefits your family may receive upon policy’s maturity or your demise the amount is totally tax-free.
- The benefit of buying early
When you are young and have just started working, you may not even think about buying a life insurance policy. However, experts recommend purchasing a life cover at a young age. This is because when you are young, you can avail the benefit of getting high coverage at an affordable premium.
The premium for young life insurance buyers is much lower than for the old aged for the same policy and coverage amount. And, if you are buying a term plan, the policy will remain the same throughout the tenure.
Final word
Now that you are aware of the benefits of a life insurance policy, give your family the financial protection they need and purchase a life insurance cover now.