Life Insurance Buying Guide : 10 Reasons Why You Must Buy a Life Insurance Now!

Planning to Buy a Life Insurance? Here’s your Life Insurance Buying Guide. Get to know the Top 10 Reasons Why You Must Buy a Life Insurance Now.

by FighterMan Updated: 01 May, 2021, 14:09 IST
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No matter how painful the thought of leaving your loved ones behind is, death is unavoidable and also pretty much unpredictable. While that does not certainly mean you should spend the rest of your life in morbid pondering, it is practical to secure the future of your family after you while you make the most of the time you have on earth. Emotional distress aside, the family of a deceased person mostly suffers from financial instability and uncertainty. Sure, you want to save your family that burden while they grieve you. And the best way to do that is to buy a life insurance policy.

Life Insurance Buying Guide
What Is Life Insurance?

Life insurance is a contract between a policy holder and an insurance agency. The policy-holder pays the insurer a certain amount of money, known as 'premium,' regularly over a period of time. In exchange, the company pays the policy holder's family a pre-decided amount, known as 'coverage amount,' in case of the policy holder's demise.

Among the two kinds of policy, term insurance is bought for a fixed period. The coverage money is paid at the policy holder's death within that period or at the end of the term. An endowment plan covers the entire lifespan of an individual.

Related Read: COVID-19 Health Insurance Policy - Corona Kavach vs Corona Rakshak vs General Insurance

Life Insurance Buying Guide: 10 Reasons Why You Need a Life Insurance?

You probably knew about life insurance already. But, many people shrug at the suggestion of purchasing a life insurance policy. However, you are never too young or too financially secure to buy a life insurance policy. Here are ten reasons why your decision to put off life insurance may cost you heavily.

1. Financial Protection

    If you're an earning member of the family on who other members depend, your sudden death is likely to destabilize the monetary setup of your family. To make sure your family gets to avoid an abrupt plunge into poverty, buy life insurance that guarantees to compensate for the absence of a member's income.

    2. Paying of Debts

      Even if your family has their source of income and does not depend on you, there might still be unpaid debts and loans they will have to settle after you're gone. If you have something like a home loan or an education loan, it is wise to have life insurance beforehand.

      3. Unachieved Dreams

        Every family has goals and plans for the future. Do you want your family to give up on theirs when you die? If not, make sure you have their future insured by a policy that promises the amount of financial support they will need to carry on with their dreams of education, business, job, or otherwise.

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        4. Period for Stabilization

          Often, the death of an earning member leaves the family so financially devastated that they take desperate measures to make up for the loss. The lump-sum given by the insurance agency will grant them enough time to recover from the untimely financial blow.

          5. Savings for Future

            Life insurance is a low-risk investment option. The premium you pay works as a savings option with the promise of a rich dividend. Especially term insurance policies work as a great alternative to regular savings.

            6. Tax Savings

              As an investment option, life insurance has tax benefits as well. According to Section 80C of the Indian Constitution, premium paid up to 1.5 lakh rupees for life insurance is exemptible from a person's taxable income. So, if you want to save tax, life insurance is the place to go.

              Related Read: How to pay Life Insurance Premium at a Discount?

              7. Business Coverage

                If you're a business owner, some policies not only commit to insuring your family but also your business. Often the passing away of the owner causes the company to suffer from significant financial losses that sometimes lead to bankruptcy as well, the latter especially applicable to small business.

                8. Life Risks

                  Life is full of risks. But for some people, the risk is higher than the others. If you have a medical condition, unhealthy habits like smoking or alcoholism, risky hobbies, or a risky job, the most responsible decision will be to get a life insurance plan for those economically dependent on you.

                  9. Premium Rates of Life Insurance

                    Premium rates of insurance agencies depend on multiple factors, including age, income, health status, etc. While you might think you're too young or fit to bother about life insurance, your youth might be the best time to buy one. The chances are that you're healthy and do not have a serious medical history, and hence, you will not be charged a high premium rate.

                    10. Qualifications

                      Insurers check for specific qualifications before agreeing on covering you. Coverage isn't available for certain illnesses and conditions that you might not have now but can develop any day. To avoid a situation where you do not get insurance or get it only at a costly premium rate, be early.

                      Signing Off

                      The idea of an unknown future can be unsettling. But while you cannot regulate the happenings of the future, there is a way you can make it less scary for those who love you and depend on you. So, what are you waiting for? Choose from the various options available in the market, consult an expert for advice and purchase a life insurance policy as soon as possible. You can share your views regarding this article in the comments below.

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                      I bought life insurance of Max life of 50L cover till 70 years of age. Premium is Rs.534 including gst per month for upto 60 years of age.

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