REASONS FOR PURCHASING A LIFE INSURANCE POLICY?
Purchasing life insurance is one of the important financial decisions. However, for what reason is it so important?
All things considered, paying little mind to the amount you procure, no one knows what the future holds.
Bunches of individuals pass on a rashly consistently from sickness or accident and, in the event that you happen to be the sole provider in the family and you were to pass away,
it could have to destroy ramifications for your friends and family their capacity to pay family unit costs, obligations and keep up their way of life.
Below are the compelling reasons for buying a life insurance policy:
- LOOKING AFTER YOUR LOVED ONES EVEN AFTER YOU’RE GONE
- DEALING WITH DEBT
- HELP ACHIEVE LONG-TERM GOALS
- LIFE INSURANCE SUPPLEMENTS YOUR RETIREMENT GOALS
- BUYING INSURANCE IS CHEAPER WHEN YOU’RE YOUNGER
- YOUR BUSINESS IS ALSO TAKEN CARE OF
- TAX-SAVING PURPOSES
- A TOOL FOR FORCED SAVINGS
- YOU MAY NOT BE QUALIFIED FOR IT LATER
- PEACE OF MIND
- LIFE INSURANCE CAN HELP WITH FUNERAL EXPENSES AND MORE
- LIFE INSURANCE PROVIDES CASH WHEN IT’S NEEDED MOST
- LIFE INSURANCE BUYS TIME AND OPTIONS
The lightest you can do, in this way, is to anchor your family’s monetary future by purchasing a life insurance policy.
Plus, don’t disregard the advantages of a life insurance amid your lifetime, particularly if you are young.
The greater part of us realize that life insurance gives in general significant serenity, but have you considered the specific reasons why you personally may need life insurance?
It’s useful and savvy to envision how your friends and family will pay the bills when you pass away.
Some of the time, it’s the blend of entire and additionally term life insurance benefits that can enable families to cover day by day costs, doctor’s visit expenses, burial service expenses and that’s only the tip of the iceberg.
life insurance policy, reasons for buying it explained
LOOKING AFTER YOUR LOVED ONES EVEN AFTER YOU’RE GONE: This is the most imperative part of life insurance that one needs to factor in.
Your family is dependent on you even after you’re gone and you unquestionably would prefer not to disappoint them.
Whether it’s for replacing lost income, paying for your child’s education or making sure your spouse get the much-needed financial security, life insurance could save the day for your surviving dependents.
DEALING WITH DEBT: You don’t need your family to manage money related liabilities amid an emergency.
Any outstanding debt-a home loan, auto loan, personal loan, or a loan on credit cards will be dealt with on the off chance that you happen to purchase the correct life insurance policy.
HELP ACHIEVE LONG-TERM GOALS: Since it is an instrument that keeps you put resources into the long haul, it would enable you to accomplish your long haul objectives, for example, purchasing a home or arranging your retirement.
It additionally provides you with various investment options that come along with different types of policies.
Some policies are tied to certain investment products that pay dividends based on their performance.
In the event that you are settling on an investment-linked policy, make sure to read the fine print to be completely mindful of the potential dangers and returns.
LIFE INSURANCE SUPPLEMENTS YOUR RETIREMENT GOALS: Who wouldn’t care for their retirement reserve funds to last until the point that they do? With a life insurance plan, you can guarantee you have a standard stream of wage each month.
Placing cash in an annuity resembles a benefits plan-put in some cash routinely in a life insurance item and appreciate an enduring salary consistently even after retirement.
BUYING INSURANCE IS CHEAPER WHEN YOU’RE YOUNGER: Not every millennial need a life insurance policy.
If you haven’t created an emergency fund or you’re still living off your parents’ money, insurance shouldn’t be a priority.
However, if you do have dependents or you have co-signed a loan with your parents (or any other member of your family or friend), whether it be a student loan or a home loan, you need to start considering buying a life insurance policy.
Besides, coverage costs are much lower when you’re single. Insurance agents may try to sell you a policy that you might not need.
Therefore, do your due diligence or approach a financial planner to determine how much insurance you need considering the other assets you may own.
Even if you’re single, there may be other dependents and you need to ensure they’re taken care of. Pradeep Pandey, chief marketing officer, Future Generalist Life Insurance, says, “The earlier the better.
For instance, single people provide financial support for aging parents or a sibling with special needs. Insurability is another reason to consider life insurance when you’re single.
If you’re young, healthy and have a good family health history, your insurability is at its peak, and you can get the best rates on your life insurance policy.”
YOUR BUSINESS IS ALSO TAKEN CARE OF: Life insurance isn’t only for yourself and your family. Some insurance policies also take care of your business.
If you own a business, then your business partner can purchase your portion of the business without hassle. Your business partner(s) will enter a buy-sell agreement and the payout would go to the deceased partner’s nominees, but without giving them a stake in the company.
There are two types of life insurance policies-a term insurance policy and a life insurance policy.
While we are all aware of the death benefits these insurance policies provide, we know little about the various options they lay out that could help strengthen your financial position.
A term insurance provides protection for a specified period of time (10, 20 or 30 years) and pays out the benefits only if you die during the term.
The policy will expire and coverage will end if you outlive your policy.
An investment-cum-protection plan, on the other hand, offers you a lump sum amount on the completion of the term of the policy.
These plans also offer you protection but the cover is usually not as high as offered with term plans.
TAX-SAVING PURPOSES: You could save taxes with insurance policies irrespective of what plan you buy.
The premium you pay on an insurance policy is eligible for a maximum tax benefit of Rs 1.5 lakh under Section 80C and for tax-free proceeds on death/maturity under Section 10 (D) of the Income Tax Act, 1961.
A TOOL FOR FORCED SAVINGS: If you choose a traditional or unit-linked policy, you pay a premium each month, which is higher than what it costs to insure you.
This bit of extra money is invested and it accrues cash value.
This cash can then be borrowed against the policy or you can
YOU MAY NOT BE QUALIFIED FOR IT LATER: Life insurance policies run on uncertainties.
You may be healthy now and paying a premium for life insurance may seem to be an added financial burden, but if you suddenly fall ill, you may not be allowed to but a life insurance policy.
Therefore, it is imperative to buy one early on in your life because it remains in force if your health deteriorates later on. Insurance companies allow you to attach certain riders or benefits to your existing or new policy.
These riders enhance the quality of your insurance.
The accelerated death benefit rider, for instance, allows the policy owner to avail all or a part of the policy’s death benefit if he or she has less time to live due to a critical illness, or wants to use the money for medical treatment or related expenses.
PEACE OF MIND: Death is unavoidable. In the face of tragedy, the least you can do for your family is to secure their financial future. Even if it is a small policy, you know that you’ve done all you can to help them tide over difficult times.
Pandey says, “Life insurance is a great tool for both protection as well as helping a consumer save in a disciplined manner, which leads to the creation of a good corpus.
The need for life insurance changes at different stages of your lifecycle depending on the financial obligations and dependencies.”
LIFE INSURANCE CAN HELP WITH FUNERAL EXPENSES AND MORE: No one wants their family to experience hardship in paying their burial expenses.
This may be one reason why you’d consider adding a small supplemental life insurance policy — just for an amount that would cover those final expenses.
Or, even if you already have an employer-sponsored life insurance policy, maybe its face value is a little too low for comfort when compared to your family’s needs.
Additionally, some people purchase life insurance protection when an existing insurance term policy is ending or has already expired.
LIFE INSURANCE PROVIDES CASH WHEN IT’S NEEDED MOST: Your life insurance policy can deliver a specified sum of money at the exact time of need.
Upon your death, your family can be assured that the amount you have chosen—perhaps hundreds of thousands of dollars; maybe even millions—will be there almost immediately.
And that death benefit is generally not subject to federal income taxes. For example, a $500,000 policy provides $500,000 in death benefit proceeds.
If you are not completely certain that your coverage is in line with your family’s needs, please contact your New York Life agent.
When you meet, you’ll work together to determine how much coverage you need, review what products and policies are right for you, and review cost comparisons.
We’re always here to help you make the best decisions based on your individual needs, current situation, and long-term goals. Don’t have an agent? Click on the “Talk it through with an expert” button to find one near you.
LIFE INSURANCE BUYS TIME AND OPTIONS: Too often, when an income earner dies, survivors are forced to make tough, dramatic decisions—and to do so quickly—at a time when they may not be emotionally in a position to make good choices.
Life insurance gives survivors a chance to adjust over time rather than having to move to a downsized home or find a new job right away.
Your life insurance gives your family choices by providing the benefits to help pay off debts, to help meet housing payments and ongoing living expenses, to help fund college educations for your children or grandchildren, and much, much more.
You buy life insurance because it is the best way to protect your loved ones. It is a financial decision…kind of. It is an emotional decision…sort of.
It is about love and caring and the future…most definitely. Still, millions of people buy life insurance every year for reasons that are often difficult to express.
At the same time, the reasons are simple and obvious. That’s the thing about life insurance.
The idea may be simple, but the reasons behind it cut deep, to our very core—almost to an instinctive level. The overall riding factor is that life insurance is for the living. It’s not about you.
You know that should anything happen to you, the life insurance you have purchased is in place to protect and provide financial relief for those who must carry on without you. It’s about them.