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Why do you need life insurance??

Life insurance is a very important financial expense, which I would rather call an asset that every person should own. However, according to statistics only about 10 per cent of Indians have life insurance cover. Did you know that apart from securing the financial future of your family, if in case something happens to you, there are other important benefits of having a life insurance cover?

Let’s see them one by one now.

  • As we all know, the most important aspect of having a life insurance is to make sure that your dependents, your family, your loved ones are well taken care of financially even in your absence.
  • If you make sure to do your homework and buy a life insurance policy for the right amount, it will also help your family to deal with outstanding loans such as home loan, car loan or any other personal loan.
  • It helps you to reach your long term goals as it keeps you invested for a long period of time. This will help you in buying a home loan or with your retirement. Thus it helps in wealth creation.
  • With a well-planned life insurance cover, you can make sure to secure your retirement life with a regular flow of income on a monthly basis.
  • There are some insurance policies that not only take care your family but they also help to cover your business. You can check an agent regarding this option and he/ she will be able to explain to you more about this type of policy.
  • Insurance plan also helps to save taxes. The premium that you pay towards the insurance cover is eligible for tax benefit under Section 80C. It also provides tax-free proceeds on death/maturity under Section 10 (D).
  • Policies like unit-linked policies have higher costs for insurance cover. That extra money is actually invested in other investment options. This accumulates more money value that you can withdraw, borrow or sell as you wish.
  • You can opt to attach other benefits what are called riders to your policy (existing or new). For example with the accelerated death benefit rider one can withdraw all or a part of the policy’s death benefit that person has some critical illness and has less time to live. They can use that money for their treatment or other related medical expenses