Saving to meet future financial needs is something that everyone does. Systematic savings over a period of time should give you enough returns to meet all your financial goals. However, time is something that everyone tends to take for granted. If something were to happen to you, your family would be left in a precarious financial situation. A life insurance policy is an important investment that provides financial security to your family in your absence. By paying a relatively small amount of premium, you can ensure a sound financial future for your family. With respect to finances, life will be the same for your family members, in spite of losing an earning member. Hence, buying life insurance is an important step towards securing the future of your family. Aside from the obvious, here are five more reasons why you should buy a life insurance policy.
Great for long term goals
Life insurance policies can also be utilized as an investment for the long term. Types of life insurance policies such as ULIPs and endowment policies doubles up as a savings plan along with providing a life cover. Such plans may provide good returns even if you happen to survive the policy term. Hence you can plan for long term goals such as children’s marriage, education etc.
Pays off debts
Most people have loans, mortgages and other forms of liabilities. By taking up life insurance, you need not worry about outstanding loans and mortgages even if something were to happen to you. A life insurance policy will pay for all your mortgages and loans in the event of your untimely demise. Hence, you can protect your loved ones from the burden of debts.
Term insurance policies offer a huge pay out (Life cover) compared to the amount of premium paid. Even if you are able to pay only two life insurance premiums, your beneficiaries would receive the full amount in the event of your death. By buying a life insurance policy at a young age, you can enjoy the benefits of life insurance by paying a lower premium.
When it comes to life insurance, policy holders have flexibility in terms of time frame, coverage, the amount of premium, extent of savings as well as risk appetite. Hence, you can choose life insurance policy according to your financial requirements.
Life insurance also offers attractive tax benefits which make it a very beneficial financial instruments. Life insurance policy holders may obtain the benefits of both exemptions and deductions under the section 80 C and Sec 10(10)D of the income tax act.