There are no guarantees in life. Have you considered the possibility of suddenly passing away or being diagnosed with a serious ailment?
Life insurance is one way to procure financial security in case of an unforeseen event. Commonly, some people do not want to avail of insurance because of the additional burden of premium.
However, here are five reasons why life insurance is important wherein the consequences of not buying a policy are explained:
- Leaves your family in financial crisis
In case of your unforeseen absence, you do not want to burden your loved ones with financial distress during an emotionally trying time. If you are the only earning member, how will your family meet their regular expenses in your absence? They may need to compromise on their lifestyle due to liquidity crunch.
This is where life insurance plans are beneficial. The benefits are paid to your family members in case of an unfortunate event. Term plan is an affordable ways to avail higher coverage to secure the financial stability of your loved ones.
- Results in a debt trap for your family
Perhaps, you have availed of a home loan, car loan, and even a personal loan. Unfortunately, the liability does not end in your absence and your family will have to repay the outstanding amount. In the absence of a life insurance policy, your family may be unable to repay these liabilities and may have to face severe consequences. Even if you have no debt obligations, they may need to avail loans to meet their financial requirements. The right insurance policy acts as an income replacement ensuring your family does not fall into a debt trap.
- Possibility of not letting your child live his dream
In your absence, your child may not have the chance to fulfill his dream. Education costs are constantly increasing and it is a huge task to meet these expenses.With a child plan, you can build a sizeable corpus over the long-term that ensures he does not have to forego his education due to lack of funds.
- Fails to provide adequate finance for your family or retirement planning
One of the other benefits of life insurance is being financially independent in the post-retirement years. A pension or retirement plan provides you with a regular income when you are no longer employed. Even if you do not plan for your retirement, consider the financial stability of your partner in your absence. The policy benefits will be paid to your spouse in case of an untoward incident to help your partner survive during the senior years.
- Missed opportunity
Lastly, do not forget the importance of life insurance in reducing your tax liability. Section 80C of the Income Tax Act provides tax deductions of up to INR 1.5 lakh per annum. Additionally, death and maturity benefits received under life insurance are tax-free under section 10 (10D).
Benefits of life insurance that you must not miss!
- Prevent financial crisis for your family
- Ensure your survivors do not fall into a debt trap
- Secure your child’s future
- Build retirement corpus
- Save money through tax benefits
Now that you understand about life insurance and its importance, do not procrastinate and get one today.