The necessity of investing in life insurance cannot be underlined enough. Life insurance is designed to offer financial precautions against the insured’s death and functions as an intelligent investment plan, which helps you fulfill numerous life goals in turn. The life insurance business in India has been enjoying steady expansion as more and more people are coming up to the necessity of investing in life insurance policies. The life insurance market showed growth of 12 percent between April 2016 and March 2017, with premium income exceeding Rs.105.26 billion in this time. There are over 360 million policyholders in India and counting.
However, the insurance business is positioned to witness at least 12-15 percent growth over the next five years, suggesting that a massive chunk of the population is still not protected by life insurance. Despite being a heavily populous country, the Indian insurance market accounts for only 1.5 percent of the total insurance premiums globally. This implies a critical need for insurance coverage for a majority of the Indian population.
Conventional wisdom promotes the acquisition of life insurance in the later years of one’s life. However, to preserve the significant milestones in their lives and those of their loved ones, people of every age group should conclude that integrating a life insurance policy is necessary for their financial portfolio.
One of the most generally asked questions about life insurance investing would be, is there a perfect time to invest in a life insurance policy? The answer to that question would be the earlier, the better. However, if you haven’t invested in life insurance coverage yet, it’s never too late either! Various life insurance products in the market take into account your age and align with your aims properly. So, expressed, the optimum time to invest in life insurance is now.
Each life stage comes with its own set of obligations, and life insurance lets you be prepared for any scenario, thereby assuring a financially secure future for your family. To become a policyholder now to stay protected for long! In case you are considering a life insurance investment, here are some reasons to do so:
- You may not qualify for life insurance later
Uncertainties are part and parcel of existence. You may be well and fit at present, and paying the life insurance premium may seem an unnecessary expense. However, it is worth it since you will not be allowed to obtain life insurance coverage if you fall ill later on. Buying life insurance early is vitally essential before any risks of your health deteriorate later on.
- The younger you buy, the cheaper your insurance plan
Life insurance policies would be much cheaper when you invest in the same at a young age. The younger you are, the more affordable your insurance plan will be. Plan out the insurance coverage you require even if you are currently single and do not have direct dependents. Single folks often have to provide financial assistance to siblings or parents. Insurability is another element worth considering. The younger and healthier you are, the more insurable you will be. You can thus receive the best possible insurance policy rates.
- Supplement Retirement Goals
Everybody wants healthy retirement savings, which last for an extended period. With the right life insurance plan, you can get regular money every month in the future. Investing money in life insurance helps you augment your retirement plans.
- Higher Savings on Taxes
You can expect tax savings with your insurance coverage. The premium paid on life insurance policies is always eligible for the maximum tax deduction up to Rs.1.5 lakh as per Section 80C. You will also be suitable for tax-free proceeds in the event of maturity/death under Section 10 (D) of the Income Tax Act of 1961.
- Death benefits and how they operate
To begin, here’s what death benefit means: If you die while your life insurance policy is valid, your beneficiaries will get a death benefit payment – whether it’s a lump sum or anything else. A few things about beneficiaries should know whether you’re obtaining life insurance or submitting a claim.
- Life insurance policies require that a beneficiary be specified.
One beneficiary can be part of a bigger group — and this is frequently the case in practice.
A charity, family trust, or even a corporation can be a beneficiary instead of a specific individual or group. A beneficiary does not have to be an individual.
- Financial support to your aging parents.
In a perfect world, your parents would already have life insurance in place as part of their retirement strategy. The AARP Public Policy Institute predicts that roughly 6.2 million millennials provide care for a parent, in-law, or grandmother, with that figure anticipated to rise over time. Life insurance with a long-term care rider can help you pay the costs of caring for a parent who lives at home, is assisted living, or is in a nursing facility.
- You’re self-employed or run a family business.
According to Prudential financial adviser Silvia Tergas, when a family member is essential to the company’s performance, their disability or death can cause revenue streams to dry up. She proposes buying life and disability insurance for the company, naming the company as the beneficiary so that the business can continue in death.
As a result, if you get a business loan, you’ll very certainly be compelled to purchase life insurance, such as decreasing term life insurance, with your bank identified as a beneficiary to settle the obligation in case you die. Similar to obtaining private student loan debt life insurance.
- You’re expecting a child, or you’ve already had one.
The CEO of Brokers International, Mark Williams, told Insider that you should buy life insurance if you don’t make it home and someone is dependent on your income to survive. When a youngster is born, most individuals elect to purchase life insurance. Most people get life insurance to ensure that their loved ones will retain their present quality of living in the case of their death. Life insurance is a smart purchase if you plan to have a kid within the next year or two.
If you’re already pregnant and the family breadwinner, you can buy life insurance, but Logan Sachon, an insurance specialist at Policygenius, says you’ll receive the best prices if you have the medical exam before or after pregnancy.
- An heir is not the same as a beneficiary under a life insurance policy.
A will presumes an heir but specifies a beneficiary instead. In the event of intestacy (i.e., death without a will), this means that a person’s spouse, children, and other family members may be legally entitled to inherit the deceased’s estate. Most life insurance policies include one or more heirs as beneficiaries, although this isn’t compulsory. There are several reasons to name a beneficiary other than your spouse or children, such as:
- Leaving money to care for other family members, such as parents or siblings, is something you’d like to send to your beneficiaries.
- A family-run corporation could benefit from your financial support by continuing to operate after your death.
- You decide to use your tax plan to leave money to your grandchildren instead of your children.
- Peace of Mind
What happens to your loved ones when you are no longer there? Death is an inescapable reality of life, and we all worry about taking care of our families. Your family will depend on you throughout your lifetime and also after you are not there anymore. Invest in a decent life insurance plan and put your fears to rest. Your insurance investment will take care of your family in any situation. It will aid in replacing lost household income, paying for the education of your kids, or even providing financial stability to your spouse if something happens to you.
Investing in life insurance should not be viewed as a burden but rather as a need, both for defending yourself and your family from threats and ensuring greater peace of mind.