Here’s how life Insurance can relieve your financial burden
Do you often find yourself wishing to go back in time when there were no bills to pay? This is true for most of us who are burdened by the increasing financial responsibilities in life. As you grow older, managing your expenses can become the source of consistent stress. But, with the right plan, you can ease the load significantly.
A life insurance policy is a financial instrument that can enable you to do so in several ways. If you have dependent family members, insuring your life with adequate cover is a priority. It protects your loved ones in case of an unfortunate incident that can substantially impact their financial health.
While you make investment plans to increase your savings and accumulate wealth, a life insurance policy creates a shield of protection around you and your family. It is safe to say that a life insurance policy forms the most foundational layer of your financial plan.
But, the best life insurance policy can be one that allows you to do more. You can alleviate the financial burden by securing life cover and take advantage of other unique benefits that different life insurance plans may offer.
Let’s discuss how such a life insurance policy can be of help:
Protection For Loved Ones
The primary purpose of life insurance is to ensure protection for your loved ones. It is the most important factor that drives people to buy a life insurance policy. It is especially valuable if you are the sole breadwinner of the family with multiple dependents.
Most households in India are keen on inculcating savings habits once you start earning. However, saving your money for a rainy day may not be as systematic as a life insurance policy. The personal savings may not be sufficient to meet the demands if the need arises.
And, in the absence of a life insurance policy, your family may face severe financial distress upon losing the sole source of income. But, if you plan and buy a life insurance policy, it can help with disciplined savings that make you capable of meeting the objective.
Ensuring that your loves ones are not dependent on anyone else for their survival in difficult times is crucial. A life insurance policy serves that purpose well if you carefully select it. Among several types of life insurance, it is up to you to choose one capable of providing the desired degree of support.
You can make sure your loved ones can maintain their lifestyle and cover their expenses with the best life insurance policy for them. It can be used to replace the income source or pay for significant costs such as a child’s higher education, repaying outstanding debts and financial security for the spouse.
No Compromise On Life Goals
Since a life insurance policy is a long-term instrument, it can help you achieve life goals such as buying a house or a car or plan retirement. Some life insurance policies have an investment component that allows you to create a substantial corpus over time. You can select the features of a life insurance policy most suitable to your requirements and optimize the benefits.
For instance, Unit Linked Insurance Plans (ULIP) is an innovative financial tool that brings the investment and insurance component together under one plan. If you choose to invest your money in such a policy, make sure you read the policy document carefully to avoid any confusions later.
Planning for Retirement
Having a secure life after retirement is a must, for which you need to make a sound financial plan. A life insurance policy can be used as a tool for efficient retirement planning. You can secure a regular income source for life post-retirement with the right kind of life insurance policy.
If you begin planning early in life, you can maximize the benefits and reduce the financial burden tremendously. It will give you more time to accumulate wealth and, thus, remain secure without any hassle.
Peace Of Mind
According to an IRDA survey for insurance awareness, 57% of the country’s uninsured households believe that insurance is relevant to them. This is one of the reasons why a life insurance policy is steadily becoming more popular.
Not to mention, financial stress can be the cause of severe health problems in life. It can also result in further mismanagement of your money if you are unable to cope with it. The assurance of a life insurance policy can reduce the anxiety to a great extent.
It gives you the confidence of security for your loved ones in the face of an unexpected event. Thus, giving you the peace of mind to handle other important investments competently.
For a taxpaying individual, financial tools that can reduce tax liability are extremely useful. Not only does a life insurance policy come with financial security, but it also allows the policyholder to reduce their taxable income. Under Section 80C of the Income Tax Act, the premiums paid for life insurance are eligible for a tax deduction.
For a modern investor, the importance of having a diverse investment portfolio is undeniable. You can address several financial concerns effectively by doing so. Therefore, remember to consider the role of a life insurance policy in the long run.