As the world grapples with the novel coronavirus, it has been firmly established that life is uncertain and an eventuality can strike anytime. As much as it is essential to take care of your health amidst this pandemic, you must not overlook the importance of financial well-being during such uncertain times. Purchasing a comprehensive life insurance policy will help you lay the foundation of a financially secure future. However, what is life insurance? Moreover, why is it important? Apart from safeguarding the future of your family members in your absence, a life insurance policy can also serve as a great investment option.
Why is life insurance important?
Protects your family
By purchasing life insurance, you can ensure that your family is protected against financial hardships in case of your untimely demise. If you are the primary breadwinner of your family, buying a life insurance policy becomes even more essential. In case of any eventuality, the lump sum amount obtained can prove to be extremely helpful for your surviving dependents. The amount can be used to replace the lost income and allow your family to have a financially secure life.
Helps you achieve your financial goals
Life insurance plans such as ULIPs, endowment policies, come with a maturity benefit. Therefore, in case you survive the policy term, you would receive a lump sum amount that can help you achieve your long-term financial goals such as buying a home, saving for retirement, funding child’s higher education, etc.
Allows you to opt for critical illness rider
In case you are diagnosed with a critical illness, it can take a heavy toll on your pockets and hamper your finances significantly. However, by opting for a critical illness rider, you will be able to cover yourself against life-threatening critical illnesses such as cancer, heart attack, kidney failure, paralysis, etc. Ensure that you make a note of all the critical illnesses covered before opting for a critical illness rider.
Makes you financially disciplined
Once you purchase a life insurance policy, you would be required to make regular premium payment to keep your policy active. This will help you become financially disciplined in the long run. It is advisable that you purchase a life insurance policy at a young age. The younger you are, the lower will be your life insurance premium. This is because, at a young age, you would less be susceptible to chronic ailments such as diabetes, hypertension, etc.
You can avail tax benefits on life insurance under Section 80C and 10D of the Income Tax Act. Under section 80(C), premiums paid towards a life insurance policy are eligible for a deduction up to Rs. 1.5 lakhs. Whereas, under Section 10 (10D), the maturity benefit availed would be tax-free.
Before you buy life insurance, you must make a make a note of the sum insured and the life insurance premium. You can get an estimate of your life insurance premium by using a life insurance premium calculator. All you are required to do is enter the basic details such as your age, gender, type of coverage, any existing medical condition, etc. in the calculator, and you would easily be able to calculate your life insurance premium. Also, you must compare various types of life insurance policies offered by different insurance providers and purchase the one that best suits your financial requirement.
Now that you have a fair understanding of life insurance benefits, ensure to make the most of it to keep yourself financially secured during these challenging times. With leading insurance companies, you can easily purchase life insurance online from the comfort of your home. Lastly, read the policy wordings carefully before purchasing life insurance. This will help you avoid any inconvenience in the later stage.