Buying a life insurance policy is an answer to life’s uncertainties. You never know what the future has in store for you, hence it is important to ensure that you and your family are well-protected from the unpredictable and inevitable turn of events in life. Here are some reasons why having a life insurance policy is important.
To provide protection to your family when you are gone
If you are the sole breadwinner of your family, then buying a life insurance is mandatory as it replaces your income in the event of your death. Your family could suffer financial hardship with the loss of your income. Moreover, it would be difficult for them to realise future goals like children education, child care etc.
Pay off your debts
You wouldn’t want your family to suffer in debt after you are gone. They need insurance to cover any outstanding debts, like mortgage, credit cards, and car loans. Hence, depending on the type of life insurance policy, the cash value can be used to pay the bank or credit card company. In this way, you need not worry about how your loved ones will pay off the mortgage or compromise on the lifestyle.
Leave an inheritance
You can name your beneficiaries through your life insurance policy. Hence, in the unfortunate event of your death, you can still leave a legacy for your children.
Peace of mind
In the face of adversity and uncertainties in life, having a life insurance policy not only protects your family but also helps them in the most difficult time of life. While it cannot replace the loss that your family goes through, it can at least take care of their well-being.
Your life insurance policy provides you tax benefits. You can claim tax relief based on the premium amount that you pay.
Take a policy while you are healthy
With age and ailments comes financial burden as well. Hence, it is a good idea to buy a policy when you are young. Not only can you afford while you are young, but your policy benefits will stay with you as your health declines. Moreover, you can take advantage of policy riders too as many insurance companies gives you the freedom to attach riders to your policy. These riders improve the quality of your insurance as well.
Protect your business
You can buy a life insurance policy for your business as well. There are two types of life insurance policies that are available -a term insurance policy and a life insurance policy.
A term insurance provides protection for a specified tenure and provides the benefits if you die during that term. A life insurance policy, on the other hand provides a lump sum amount on maturity. It is an investment-cum-protection plan that provides support all through.