Why Life Insurance Is So Important
Life insurance is one of the most critical financial decisions that you must take for the financial security of your life. Many people believe that it is a thing that is required when we are old, but that’s not true. Technically, we are all uncertain about our future, and we don’t know what lies ahead. Accidents or misfortune does not come knocking on the door. Many people die prematurely or become disabled due to some prolonged illness or accident. The issue can be more disastrous if the person who has died or become disabled is the sole bread earner of the house. It then becomes a challenging affair to maintain the expenses of the house, debts, bills, and standard of living.
In such situations, life insurance becomes the tool of financial backup for the family of the deceased person and gives them the ability to maintain their various expenses. Life insurance comes with other benefits too, which you can enjoy later on in your life. To know in what way life insurance is essential is for you and what its benefits are, have a look at the points given below.
Looks after your loved ones when you are no more
The biggest advantage of life insurance is that it provides financial security to your family in your absence. If the insurer dies due to any circumstances, then the insurance company offers financial cover to its family. It is extremely helpful for the family as they lose their income source due to loss of the earner, and the money given by insurance companies assists in maintaining daily household expenses and children’s school education.
Dealing with debt
When you are gone, you don’t want your family to be in a lurch of financial crisis, especially if you have taken any loan like housing, automotive, or on credit card, which can difficult for them to deal with. In such situations, the money received from the insurance company will help in paying off debt and manage the financial burden with the help of it.
Can be a supplement for your retirement goal
Everyone would like their retirement savings to last until the time they do. With the help of a life insurance plan, you can make sure that you have a regular stream of monthly income. Investing your money in an annuity is like a pension plan. Put some money on a regular basis in the life insurance product to enjoy a fixed income every month even after retiring.
Buy insurance when you are younger
Buying an insurance plan in your younger days is a much cheaper and wiser decision. It becomes more important when you have dependents in your family, and you are the sole bread earner. Buying an insurance product can assure a financial backup for them if anything unfortunate happens to you or if you want to earn a steady income when you retire from your job.
Tax savings
Insurance policy not only provides you financial coverage but also helps in saving you from taxation. The premium paid on the insurance policy is eligible for a maximum tax benefit up to Rs 1.5 lakh under section 80c and avail tax-free proceeds on death or maturity under Section 10(D) of the Income Tax Act, 1961.
Takes care of your business as well
Life insurance not only looks after your family but also after our business as well. In case you own a business, then your business partner can buy a part of your business without any issue. The business partner or partners shall enter a buy-sell agreement, and the payout will go to the deceased partner’s nominees, but without giving any stake in the company.