Irrespective of the age group you belong to; it is important to know the essence of financial security to live a worry-free life and survive uncertain times. It is also essential to keep your family financially shielded in case of your untimely demise or any other mishap. Along with making arrangements for your family, it is essential to generate passive income by investing money in profitable investment vehicles to deal with unexpected income irregularities. To work out a solution for investment and coverage, you can choose to invest in a life insurance plan. It is an agreement between the insurance provider and the policyholder. If the policyholder dies during the tenure, the insurance provider gives an assured sum to the policyholder’s family in exchange for the premiums paid over time. Below mentioned are the 7 benefits of investing in life insurance:
- Long-Term Security
Once you buy a life insurance plan, you can be financially secured for the long term. The term and the amount vary for individuals, as they might take up different plans based on fund availability.
Generally, it is beneficial to begin investing early and invest for an extended period, such that, if anything uncertain happens, your family will have a considerable amount of funds to live a stress-free life. Note that in a few types of life insurance, as an endowment plan, you will also be eligible for the benefits if you survive the tenure.
- Return on Investment/Wealth Creation
If you choose an appropriate life insurance, you can enjoy several benefits, including life coverage and investment opportunities. For example, if the investment is made in market-linked security plans such as ULIPs, or other types of similar funds, this might give you returns at regular intervals.
However, this depends on the fluctuating market conditions. On the other hand, if you invest in life insurance such as a term plan with a return on premium, you get a high sum assured, plus the benefits from riders such as Critical Illness, or accidental benefit. This will further enhance your original sum assured. The term plan will also provide your family with the total sum assured if anything unfortunate happens to you.
- Life Stage Planning
If you buy a life insurance plan, you can even plan your long term financial goals along with the life coverage, as it also acts as a long-term investment.
You can easily plan your child’s education, retirement, buy your dream home etc., depending on your life stage and the amount of risk you can undertake. However, it is better to plan and buy insurance as early in your life as possible because it will help you create a significant corpus while you enjoy lower premiums.
- Maturity/Death Benefit
With the rising number of diseases and uncertainties, you might unexpectedly catch hold of any one of them or may be due to today’s changing lifestyles. It is imperative to think practically and keep the future of your family financially secured.
To save your loved ones from financial distress during such challenging times, insurance would ensure that you have well-planned for their future in advance, so that they can live a happy, comfortable and fulfilling life. Therefore, the maturity or death benefit makes for one of the primary reasons to buy life insurance.
- Tax Savings
As per Section 80C of the Income Tax Act, you can save a fair amount of tax on the premium payments you pay. The amount invested in employee provident fund, public provident fund, equity-linked fund schemes, etc., is eligible for such deductions and tax-saving. For example, if you buy term insurance, the upper limit of the amount eligible for tax benefit is Rs. 1.5 L.P.A.
- Coverage Against Liabilities
To fulfil your aspirations and accomplish your goals, you might have taken financial support in the form of loans, mortgages and other forms of debt. Whether it is any kind of loan or credit card debt, dealing with such obligations may be a source of considerable financial pressure without a steady income-source.
It may be even more difficult for your family to manage such obligations in the event of an uncertain event such as diagnosis of a critical illness or your untimely demise. Therefore, taking a life insurance policy ensures that your family has the financial means to meet the obligations of clearing any outstanding loan and mortgage repayments on an ongoing basis, even in your absence.
Buy An Insurance Policy to Financially Secure Your Future
You can opt for buying a life insurance plan online or offline. It is advisable to buy life insurance online, as you will be able to avail benefits like making a fair comparison amongst different policies, avail automated services, cost-effective option, etc.
With the multitudes of options that are available today, you can easily compare and buy insurance with a few. Remember to consider your personal requirements, understand the insurance details, and only then buy insurance. You can even reach out to leading insurance providers to get a further understanding. So, get insured today and stay secured for the future!