Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
RSS

News

Is the importance of life insurance fading?

Author: Team Finapolis/Saturday, March 24, 2018/Categories: Insurance

Is the importance of life insurance fading?

Getting life insurance for oneself is one of the most important decisions one can take, but in spite of this, lives of only 10% Indians are insured. Regardless of your current financial situation, one can never see what the future holds. People die premature deaths leaving their families in a lurch. To avoid such devastating consequences, the importance of life insurance still remains on top to secure your family’s financial future.

Here are 10 compelling reasons to gift yourself a life insurance plan:

Financial security for family

This is the most prominent reason why most people opt for life insurance — to make sure their loved ones will be cared for after their demise. Life insurance can replace lost income, pay child’s education fees, or ensure security for your spouse.

Dealing with debt

The last thing one would want is to leave behind a pile of debt and financial liability for their families. An outstanding home loan, car loan, or credit card debt, the right insurance policy will cover it all.

Achieving long-term goals

Life insurance doubles up as an investment and thus is an instrument for long-term investments. It helps one achieve their long term goals such as purchasing property or planning for retirement. Life insurance also comes with different types of policies on offer. If you are opting for an investment linked policy, make sure to go over the fineprint and be aware of the risks involved.

Supplement to retirement goals

A good life insurance plan will ensure that you have a steady flow of income, long after your retirement. Putting money in an annuity is like putting it in a pension plan- put in money regularly for an insurance product and reap the benefits every month after retiring.

Buy insurance when you’re young

Buying insurance in your 20s is much cheaper than buying it later in life. Coverage costs are much lower when you’re single. However, if you’re single there are other factors to consider such as aging dependent parents or a sibling with special needs. When one is young and healthy, your insurability is high, and it enables you to get the best rates on your life insurance policy.

Tax saving purposes

Irrespective of the policy you buy, insurance is a tax saving tool. The premium paid for the insurance is eligible for a tax benefit of Rs 1.5 lakh under Section 80C of the Income Tax Act. The proceeds obtained on maturity/death are tax-free under Section 10 D of the Income Tax Act, 1061.

Tool for forced savings

Opting for a traditional unit-linked policy will result in you having to pay a higher premium than what a life insurance premium would cost. This small extra sum that is invested can go a long way. This sum results in cash value, which can be borrowed against the policy. One can also choose to sell it or draw income from it.

You may not be qualified for it later

One may think that in spite of being hale and hearty, paying life insurance is a burden. But it’s beneficial when one falls ill, as, during a time like that, you are not allowed to obtain a life insurance policy. Therefore, it is imperative to get one early on as a precautionary measure.  Some insurance companies allow one to attach certain benefits to existing policies. They enhance the quality of the policy. For example: The death benefit rider allows the insured person to withdraw a part of the policy’s death benefit in case of a critical illness. That sum can be used for treatment or auxiliary expenditure.

Print Rate this article:
4.0

Number of views (312)/Comments (0)

rajyashree guha

Team Finapolis

Other posts by Team Finapolis
Contact author

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Videos

Ask the Finapolis.

I'm not a robot
 
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
 
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest
 
 

Categories

Disclaimer

The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free