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Once you reach the age of around 21–24 years and you have started to make a living, your responsibility spectrum gets widened to cover your family and your loved ones as well. You may have to make many decisions, keeping your family and goals in mind. Taking a life insurance policy is one of those important decisions of life. The only thing that will look after your family after you is your life cover policy. Given below are some of the important life insurance facts that you might not be aware of.
1.Paying off debts
There will not be an issue with paying off the debt till you are alive. But, uncertain events cannot be timed. Debt is the only obligation that may make your family suffer the most. Earning the survival money may be a little easy for your parents at the age of 50+ but earning to pay off your debts is something terrible. Hence, life insurance plans will help to tackle this issue.
2.Investment component for long-term goals
Insurance is now looked upon as an investment that would reap its fruits after you are no more. However, the insurance plan also provides additional benefits wherein you can plan for your long-term goals. Such plans are known as savings plans under the insurance policy. If you start at an early age, you can enjoy the benefits of compounding.
3.Take a plan when you are young
Life insurance premiums are lowest when you are young and free of diseases or health issues. The premium cost increases as you age more. You have higher disposable income at your young age and thus you can easily invest in life insurance policies.
4.Save taxes
You can save taxes by investing in life insurance plans. Section 80C of the Income Tax Act allows a deduction for the premium payment. The deduction allowed is Rs 1.5 lakh. Moreover, death or maturity benefits are tax-free under section 10 (10D) of the Income Tax Act.
5.Deteriorating health has lower chances of getting the life cover
Healthy individuals pay the lowest premium. If you are already suffering from any health issues, you might need to pay a higher premium. One health issue invites another and hence, insurance companies demand a high premium. However, if you are at a young age, you should opt for a life insurance policy. If you do not own a policy and your health starts deteriorating due to any reason, your insurance cost may shoot up.
6.Ultimate peace of mind
The risk of premature death is always present. There is no choice when it comes to death, and it is certainly uncertain. A life insurance policy would at least provide some assurance and certainty for your family after you. Life insurance is the best investment option that acts as a shield to protect your loved ones from miserable issues later on. It reduces the impact of the shock. Life insurance acts like a secured investment and provides you with the ultimate peace of mind. You can take business risks as per your risk appetite, keeping the family secure of all consequences.
7.Death due to Covid
If you are the breadwinner of your family, you seriously need to think about Covid insurance policies to cover your back. You may choose term life insurance plans wherein death due to Covid-19 is also covered. Hence, all benefits are applicable even if death is timed due to Covid issues.
8.Assign nominees
Nominees are the individuals who have the right to receive benefits after an undesirable event. Normally, nominees are assigned at the time of purchasing a policy. However, you may also choose to assign the nominees at a later point in time. If you change your mind, you can also switch the name of the nominees during the tenure of the life insurance policy.
9.Customisable sum assured & tenure
Normally the cover is provided only for the tenure of the policy. So, all benefits would be paid only if an uncertain event happens during this time. Insurance policies give you the liberty to choose the policy term as per your needs. That’s not the only thing. You may also customise the pay-out amount as per your needs. A premium is calculated considering the selected tenure and the required pay-out amount. A higher tenure or payout implies higher premium payments and vice versa.
10.Whole life insurance
Whole life insurance refers to a combination of insurance and investment options. They provide combined benefits of survival, maturity, and death. Another feature is that the premium amount would remain constant for the entire tenure. You could always use a life insurance calculator to know the premium to be paid. It also provides financial protection for your entire life. Coverage up to 99 years is provided.
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