Have You Considered a Financial Product That Will Take Care of Your Family's Future?
Why Is It Important to Get Yourself Life Insured
The life insurance industry recorded 18.5 percent growth in new business during the first half of fiscal 2015-16, says an article published in The Economic Times in October 2015. Why is it that financial advisors consider getting life insured as a top priority? Do you need to invest in a policy even when you have a wealth creation plan in place? It is possibly one of the most important aspects of your financial plan. And it is not an option because you cannot replace it with any other product. Despite how well you are earning or how much wealth you may have accumulated; your life can be cut short at any moment, leaving your family in difficulty. You can consult your financial advisor to help you pick a policy keeping in mind your current financial condition and future financial goals. Given below are the benefits of good life cover.
Takes Care of Your Family’s Financial Needs after Your Death
The sum assured received by the nominee after your death can help your family take care of their daily expenses, maintain their standard of living, fund your child’s education and marriage expenses, and take care of other small and big expenses. In case of the absence of a policy, your family might have to cut sacrifice on essentials, as well as desires, due to the scarcity of funds. On an average, the cost of education is 8 percent of the global monthly budget allocation, according to the Nielson Global Survey, 2013 of Education Attainment. Make sure to buy sufficient cover to take care of your family’s every need after your death.
Helps Pay Off Loans
Wouldn’t it be added misery if your family had to pay off your debts while coping with your loss? Getting yourself a life insurance policy is a must if you are paying off loans or debts. Make sure that the cover your buy is sufficient to pay off those debts and buy a policy of a minimum period during which you expect to repay your loans.
It Gives Your Peace of Mind
Death is unpredictable, both for the young and old. Getting a policy gives you the peace of mind that the financial needs of your family would be taken care of even in your absence.
Helps You Fulfil Your Financial Goals
The IRDA has made it mandatory for all insurance products to provide a customised benefit illustration, depicting the guaranteed and non-guaranteed benefits at gross investment returns of 4 percent and 8 percent, respectively, says an article published in The Economic Times in November 2015.
There are five types of insurance policies sold in India: term plans, ULIPs, whole-life, endowment and money-back plans. If you have enough savings in your kitty and if you have a high risk appetite, then you can go for one of the investment-cum-insurance products. It will give you the twin benefits of wealth creation and insurance cover.
Life insurance in India is eligible for tax benefits. Premium payments towards a policy is eligible for tax deductions of up to Rs 1.5 lakhs per annum under section 80C of the Income Tax Act, while the sum assured in exempt from taxation under section 10(10D).
How to Choose a Policy
Before choosing any type of policy, you must evaluate your current financial condition, future financial goals, savings and risk appetite to make a suitable choice. While choosing the cover, keep in mind your family’s financial needs, standard of living, debts you are paying off and the inflation rate. You could also consider buying an online life insurance policy. You can save money typically in the range of 10 to 30 percent, according to an article published in Moneycontrol in February 2016.