Buying life insurance is essential because it is the best way to protect your loved ones and their financial interests in your absence. It is a crucial financial decision and even an emotional one, sort of. After all, it is about loving your family members and caring for their future.
There are millions of people who buy a life insurance policy for reasons that are often hard to explain. At the same time, the reasons to buy the policy are also practical and straightforward. That’s the thing about investing in a life insurance policy in India. While the product and the idea behind it are simple, the reasons behind it cut to the very core of your emotional being.
Buying a life insurance policy is a crucial financial decision. However, believe it or not, only 10% of Indians are insured! Many don’t understand the importance of being protected and often think about buying one only at the time of Income tax e filing.
However, you need to understand that no matter how much you earn today, you never know what the future holds for you. Many people die an untimely death due to illness, accident, or any number of reasons. If you happen to be a sole breadwinner for your family, imagine their pain and turmoil after losing you. With you, they lose not only the person they loved but also their ability to pay household expenses, debts, and other financial obligations such as your daughter’s wedding.
The least you can do right now is to think ahead and be cognizant of these uncertainties when you are planning your financial portfolio. While wealth creation is undoubtedly most important, it is also critical to secure your family’s financial future by investing in the right life insurance policy.
Here are some life situations wherein you are going to need a life insurance policy in India.
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1) When You are diagnosed with a life-threaatening ailment
Life insurance policies are designed to help you overcome life’s uncertainties. You may be hale and hearty today, but who is to say that you will not succumb to the illness that has been running in your family for generations? Hospitalizations and medical bills can be expensive and quickly deplete your life’s savings if you don’t have a robust life insurance policy to help you get by.
While it may seem like a financial burden right now, but this policy will play a massive role in keeping you afloat when the illness hits you too. Supplemented by critical illness riders, life insurance policies become your financial partner even in the time of disease. As soon as you are diagnosed with the condition mentioned in your policy document, the critical illness rider is activated and you get the sum assured that helps you pay for your treatment and related expenses without digging into your savings.
2) When you are the sole breadwinner
Life is not just about you. When you are the only earning member in your family, then you must consider buying a life insurance policy to secure the financial future of your loved ones. When you invest in a plan, it helps to provide financial relief to those whom you left behind. It will help them continue living their best life and fulfil all the financial obligations.
So if you are sceptical about investing in a policy, look at it from your family’s point of view, and you’ll see why you need one. Life insurance is a tool that protects your spouse and children from the devastating losses that can result from your premature passing.
3) When you have more dependents in your family
Your life insurance policy will deliver the sum assured at the exact time when it is needed the most. Upon your death, your family will get the policy benefit that is tax-free and will help them get on with their lives.
When you have dependents in your family that are your financial responsibility, then you need to ensure that the sum assured is enough to pay for everyone’s needs. Ideally, the coverage amount should be at least 15-20 times your annual income to pay for your family’s future financial obligations and also account for inflation.
4) When you have liabilities and loans
Do you want to leave behind mounds of debt upon your passing? If you don’t want your family to deal with financial liabilities during a crisis, then you must invest in a life insurance policy. Any outstanding debt such as home loan, auto loan, or loan on credit cards would be taken care of by your policy so that your family doesn’t have to deal with your debts.
5) When you have a risky occupation
Generally speaking, when an occupation is regarded as risky with an elevated risk of demise, then it is all the more critical for you to invest in a life insurance policy. This is all the more necessary if your family depends on your income.
On-the-road sales executives, truck drivers, coal mines, fishing and logging, and ship, are considered as professions with occupational hazards. So consider your profession and figure where you fall on the risk scale. Use this information to find suitable life insurance policies that offer coverage to people in these trades.
Since you are already working in a risky occupation, having a plan in your portfolio will give you and your family the peace of mind that they will be able to move on in case something happens to you.
Death is inevitable. However, the least you can do in this uncertainty is to secure your family and their future. Invest in a life insurance policy to help them tide over the problematic void that you would leave behind.
