Why Life Insurance Policy Should Be An Integral Part Of Your Financial Planning?

Life is full of risks and due to this, an individual is constantly worried for their loved ones. Life Insurance provides the financial protection which helps to mitigate the risks and thus gives peace of mind to an individual. It is because of life insurance that an individual can chase their dreams and leave the worries of financial protection behind. Hence, Life insurance is necessary in everyone’s life, so that full concentration can be put in achieving important milestones in life.

Life insurance plan serves many purposes like -

Safety and security

Life Insurance provides a form of financial security when the insurer dies prematurely or the insurer’s family faces an unexpected situation. It gives you the option to choose the pay-out option for the insurance payment.

Savings and investment as an option

For many of the insurance plans, you are paid regularly within the term or after the maturity of the plan. Either way, it acts as a saving option and additionally, the payment you get is more than what you have invested. Therefore, it definitely is a medium of savings.

Peace of mind

Peace of mind is a prime factor for a happy living. If you are not satisfied for any reason, your tension manifests itself in form of unpleasant reaction. The security banishes as soon as you secure yourself with the insurance plan.

Discourages dependency

No one is sure about their futures. In case of unnatural death or unexpected death, life insurance acts as a pillar for your dependents. They will not have to depend on someone for financial support. All you can do is enrol yourself in a plan and let your family be financially independent.

Promotes economic growth

For an individual, life insurance acts as a financial and emotional support system. It also helps the economy to grow. It creates savings for the country. Through the premiums deposited for years, the government of the country can use these fund towards the development of the country.

Life Insurance needs to be Integral part of your financial plan

Life Insurance needs to be an integral part of your financial planning due to its long lasting and important benefits.  One can build a corpus by getting in a habit of paying regular premiums over a period of time. It is this good habit that helps the family financially in times of financial crises.

Planning and buying life insurance is no more a complicated process. Due to internet revelation, today finding an ideal life insurance plan is like a piece of cake. Online tools such as online premium calculator, HMV calculator, comparison tools for plans etc.; help in choosing customised life insurance plan that will make the plan worth every penny. Moreover, buying the life insurance plan has been become affordable as it eradicates many costs which used to add up in the cost of the plan.

Essentials to Buying Life Insurance

Buying a Life insurance is an important decision one takes in their life. Some people just do it for saving some taxes from the hard-earned income. However, the benefits are way beyond that. There are a few essential reasons for buying a Life insurance.

  • Look after your family

When you are insured, you will have the financial security for your family when you are not around. The premiums you pay now will be a source of income for your family in the future, when they need them the most.

  • Deal with expenses

There are insurance plans, which not only help your family after your death; it also helps you to pay for your debts and expenses from the money you have saved during your lifetime.

  • Achieve the long-term goal

If you have planned to buy a house or a car for yourself, you can take loans against your premiums or you can also buy your dream house or car, once you get the matured insured amount.

  • Enjoy benefits after retirement

 Life Insurance acts as a tool after your retirement as a source of income for the premium payments. You do not have to worry about your life after your retirement.

Different types of life insurance available in the market

Endowment policy – These types of plans come with a specified maturity period. The insurer decides the maturity period for the insurance plan. In case of the death of the policyholder, the sum assured will be paid to the nominee.  In case the insurer survives the life term, the sum assured will be paid to the insurer upon maturity.

Term Insurance Plan – This is a low premium insurance plan for a few years. During the term, if the insurer faces a sudden death or temporary or permanent disability, the term insurance plan pays the sum assured through the pay-out option, chosen at the time of insurance enrolment. In case the survivor outlives the insurance term, there will not be any payment for insurance maturity.

Money or Cash plans – A portion of agreed and payable sum assured is paid to the insurer on a period basis. Once the plan matures, the remaining amount will be paid to the insurer. If the insurer dies during the term, the remaining sum assured will be paid to the dependents.

Whole Life Insurance – Unlike any other life insurance plans, whole life insurance plans provide coverage for the entire life. It comes with both maturity benefits and financial support to your family members, in case of the insurer’s sudden death. The premium paid is huge as compared with other insurance plans.

Children’s benefit – This type of insurance plan is used only to protect the life of your child. The policy can be taken on the parent’s name or on the name of the child. Once the child reaches a particular age, he/she can use the money.

Annuity plans – This is a constant source of income plan after retirement. After retirement, there are no sources for constant income. If you enrol for life insurance retirement plan today, you do not have to worry about your life after retirement. At the end of each month, you get a monthly amount.

In a nutshell

As we can see, life insurance plans come in different types and have numerous benefits. Life insurance does not only provide life protection, but also makes it easy to cover important milestones.  Without second thoughts, life insurance should be an integral part of your financial planning.

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