Who should purchase life insurance?
If you are considering investing in life insurance, the first question you will be asked is “Who should I buy life insurance? Life insurance is a good investment for anyone who has financial dependent. A financial dependent could be a spouse, children, siblings, or parents.
Investors who are looking to reap the long-term capital appreciation and tax savings that life insurance offers should also consider buying it. These are two of the few investment options that offer both benefits. A life insurance policy is one. These benefits are not the only ones that life insurance offers. There are many other ways that life insurance can benefit investors.
Here are 10 reasons why life insurance policies are essential.
To replace income lost
Life insurance policies payout death benefits in the case of the policyholder. This is a lump sum that helps the insured’s family cope with the loss of their main source of income. Life insurance is a financial benefit that can provide financial benefits to your dependents if you are the primary breadwinner of your family.
Repay pending debts
Even after the death of the policyholder, debts taken on behalf of the insured remain a financial liability. Without an alternative source of income, however, legal heirs may not be able to repay any outstanding debts. This is where the maturity benefits of a life insurance policy can come in handy.
Resolve Your Debts
You can borrow money to buy a house, car, pay off debts, or finance your child’s education. If you die before the loan is paid off, your debts will be passed on to your loved ones. Even if your dependents have a job, it can be difficult to manage the loan. If you have life insurance, this will ensure that your family is financially independent.
Support your Retirement Plan
Everyone has a natural desire to have a good retirement plan. This goal can be achieved by purchasing good life insurance policies. Some life insurance policies provide monthly income and regular income.
Enjoy Tax Benefits
Life insurance offers more than just protection. It also gives you tax benefits. You can save taxes no matter which type of life insurance policy is purchased. Under Section 80C, the cost of a life insurance premium may be written off up to Rs. 1.5 lakh. The death benefit or maturity are exempted under Section 10(10D).
To cover educational expenses
It’s very likely that your policy will mature around the time your child turns twenty-five if you buy a life insurance policy in your twenties. You can use the proceeds from maturity benefits to assist in covering the expensive price of higher education.
Diversify your investments
Life insurance is one option that comes with very low risk. Getting life insurance might be a fantastic way to balance your risk exposure if you have a stable portfolio with low-risk investments. To ensure guaranteed returns, you only need to pay your premiums on a regular basis.