No one knows what the future holds. People lose their lives to accidental deaths and illnesses every year. If the deceased is the family’s sole breadwinner, his/her family is left to face devastating consequences. Purchasing a life insurance policy is one of the most significant financial decisions you can make, to ensure that you family remains financially secure in case of unforeseeable circumstances. However, the sad fact is that despite it being so important, only 10% of the Indian population understands its importance as almost 90% Indians refuse to see the benefits of buying this policy. Here are 5 genuine reasons why you must buy life insurance.
It provides your family with financial security long after you are gone: People, who are the sole breadwinners of the family, need to understand that their families can fall into financial difficulties in their absence. The family usually depends upon the breadwinners to provide them with financial security and in the unfortunate case of the breadwinner’s demise, the dependants of the family are left to face with several financial difficulties including loss of income and paying for children’s education. The policy provides your spouse and children a cushion of money to go on living.
It helps in achieving the family’s long term goals: Since insurance policies last over a set period of time, making the annual investment in the policies in the long term can help you achieve many of your long term goals. These could include planning your retirement, buying your home, sending children abroad for further studies and so on. Furthermore, many life insurance plans are also tied with certain investment products which pay dividends based on their performance. As such, you can opt for investment linked insurance policies.
It takes care of your business: Typically, insurance policies help you take care of yourself, your family as well as your business. If you own a business in partnership with another individual, then your business partner can buy your portion of the business without any hassles. The business partner can enter into a buy-sell agreement and the pay-out would be sent to the deceased partner’s chosen nominees. However, the nominee may lose the stake in the business.
It helps to deal with debts: A life insurance policy helps your family deal with financial crises that arise due to the loans or debt you’d have taken, but were unable to pay them off. Outstanding debts on home, car, credit-card and personal loans can be paid off from the funds your family receives from the insurance policy.
It helps you save taxes: Irrespective of which insurance policy you buy, you are eligible for tax savings with your life insurance. You are eligible for an annual tax benefit of maximum ₹ 1.5 lakhs on the premiums you pay on your insurance policy, under Section 80C as well as for tax-free proceeds on maturity/death under Section 10 (D) of the IT Act of 1961.
It provides your family with financial security long after you are gone: People, who are the sole breadwinners of the family, need to understand that their families can fall into financial difficulties in their absence. The family usually depends upon the breadwinners to provide them with financial security and in the unfortunate case of the breadwinner’s demise, the dependants of the family are left to face with several financial difficulties including loss of income and paying for children’s education. The policy provides your spouse and children a cushion of money to go on living.
It helps in achieving the family’s long term goals: Since insurance policies last over a set period of time, making the annual investment in the policies in the long term can help you achieve many of your long term goals. These could include planning your retirement, buying your home, sending children abroad for further studies and so on. Furthermore, many life insurance plans are also tied with certain investment products which pay dividends based on their performance. As such, you can opt for investment linked insurance policies.
It takes care of your business: Typically, insurance policies help you take care of yourself, your family as well as your business. If you own a business in partnership with another individual, then your business partner can buy your portion of the business without any hassles. The business partner can enter into a buy-sell agreement and the pay-out would be sent to the deceased partner’s chosen nominees. However, the nominee may lose the stake in the business.
It helps to deal with debts: A life insurance policy helps your family deal with financial crises that arise due to the loans or debt you’d have taken, but were unable to pay them off. Outstanding debts on home, car, credit-card and personal loans can be paid off from the funds your family receives from the insurance policy.
It helps you save taxes: Irrespective of which insurance policy you buy, you are eligible for tax savings with your life insurance. You are eligible for an annual tax benefit of maximum ₹ 1.5 lakhs on the premiums you pay on your insurance policy, under Section 80C as well as for tax-free proceeds on maturity/death under Section 10 (D) of the IT Act of 1961.
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