Do I need Life Insurance?
Everyone wants a secure financial future for themselves and their loved ones. Everyone also wants to retire happily with a large kitty of investments built up.
If you too want this, the first thing to do is add a life insurance policy to your financial portfolio. If you are investing in your future, you may as well protect it as well.
Why do you need to insure your life?
It’s a valid question. After all, your insurance premiums do seem like a financial burden today. But, answer one question—isn’t it worth setting aside a few thousand today if it could grow into lakhs of rupees tomorrow? That amount of money could be there for you and your family when it’s needed the most.
Today you may be financially secure; as the famous dialogue goes, “I have money, a house, a car!” But will this be enough to sustain your loved ones when you are no more?
This is where a life insurance plays a big role. Even if you opt for a small life insurance cover, for say Rs. 5 lakh, this money can go a long way in ensuring your family’s financial stability in the long run. If not for a long time, it can at least pay for their monthly expenses for a few months. Life insurance, thus, acts like an emergency fund.
However, if you are prudent and opt for the right amount of life cover , the life insurance payout can even help replace the loss income that arises after you are no longer around to contribute.
This is why life insurance is a vital aspect of your financial plan to ensure future stability.
Other benefits of life insurance
- Pay debt: Do you have any big-ticket loans like a housing loan or a car loan? You may think you still have time to pay off the loan, but it’s possible this time won’t be enough. In case of your unfortunate demise, this liability may fall onto your family, which can be a huge burden on them. It is, thus, always better to have a Plan B. Life insurance can be this contingency plan.
- Future savings: Everybody plans to live a long, fulfilling life well into their golden years. Thus, it makes sense to save enough money for the post-retirement years, when you will not be earning a monthly salary. Insurance can help you plan for this phase of your life. With Money Back and Endowment Plans , you can save in small doses every year, and then see your money reap dividends in the future.
- Investments: Inflation is a reality we all must live with. Every day, the prices of goods and services climb up a notch. You can only imagine what the prices would be in the future. Investments, thus, are a must. It is important to earn at a rate of return higher than inflation. Insurance products, these days, do just this. Unit-Linked Insurance Plans (ULIPs) can help you invest your money while also availing insurance life cover.
- Child’s future: Your child’s life depends on you. It is imperative that you secure his or her future, at least until they start earning, and a large part of this is funding their education. The cost of education is rising steadily, and insurance- especially a plan meant especially for children - can really help you ensure your child is financially ready.
So, who needs life insurance and who does not?
- If you do not have a family that depends on your income, you still need life insurance. Not only can it help you pay off car loans, educations loans, home loans, etc., which might otherwise have been done by your family, it can also help you save funds for retirement.
- If you are the sole earning member of your family, your loss would leave your dependents in a financial mess. Would you not want your family to continue the same lifestyle even in your absence? A life insurance policy will provide your dependents with a huge sum of money or money in installments.
- If you are a business owner, you need to make sure that your absence would not hamper the normal operations of your business financially, which is why a lump sum insurance pay out can go a long way.
A life insurance policy provides you with the peace of mind that comes from knowing that your dependents will be financially secure even when you are not there for them, which is absolutely invaluable.