Buying life insurance plans is one of the best things you can do for yourself and your family. Life insurance is very important because it can take care of your family if something unfortunate happens to you. If you are the only one who supports your family financially, this could be hard for them. They may have trouble paying off debts, paying bills, taking care of house expenses, and many other costs. You can take care of these problems by ensuring your loved ones have a safe financial future by getting the best life insurance plans.
10 Things to Know About a Life Insurance Plan
There are many good things about having a life cover. But there are also some facts about the policy that you should know before you buy the financial product. Here are the most vital things you need to know about a life insurance policy.
- Can Take care of your family even when you’re not there
This one is clear. If you provide for your family, you may have to do many things, like pay off loans and debts, pay for your child’s education, buy a car, and so on. But if you suddenly pass away, your family will have to carry all your responsibilities. All of these problems will be easier on your family if you have an insurance plan.
- Can help with Debt management
Debt won’t help you live comfortably. If you pass away suddenly, it will be even harder for your family to deal with because they won’t have any help. A good insurance plan will help your family out in these situations.
- Can reach long-term goals without much trouble
If you want to purchase your dream home or car in the future, you can use certain types of insurance plans to help you reach your long-term goals.
- Can complement your retirement goals
Putting money into a life insurance plan, such as a pension plan or an annuity, can help you when you retire. With the accumulated gains, you can enjoy the fruits of your hard-earned labour.
- When you are younger, life insurance can cost less
If you are a student, you can get a loan for school with your parents, or guardian’s help. You should get a good life insurance plan to help pay off these loans in your absence. Your chances of getting insurance are high because you are young and in good health. This means that the premiums you pay can be less.
- Can be useful for your business
Life insurance can take care of you, your family, and in many cases, even your business in your absence. If you wish to, you can add your trustworthy business partners as the beneficiaries of your life insurance policy.
- Can save taxes
No matter what kind of life insurance plan you buy, you can save money on taxes. Under Section 80C, you can get a tax deduction of up to Rs 1.5 lakh against the premium you pay on an insurance policy. Under Section 10(10D) of the Income Tax Act, 1961, you also don’t have to pay taxes on the death or expiration of the policy. The tax deduction varies depending on whether you follow the old or new tax regime.
- Can help save more
Suppose you want to buy either a traditional or a unit-linked insurance policy. In that case, you will have to pay a premium that is more than the insurance cost. Unit-Linked Insurance Plans (ULIPs) can be modified to fit your goals and needs as they change, thus helping you save in the right manner at different stages in life.
- Getting it later can be difficult
It may seem like a financial expense rather than an investment when you are in good health and paying premiums regularly. But if you develop an illness, getting a new policy can be a difficult experience. The premiums may be higher if you indeed get approved for the life insurance plan.
You can add certain benefits or insurance riders to your current or new plan through your insurance company. Your insurance plan gets extra perks from the insurance riders.
- Can provide peace of mind
One cannot predict what unfortunate event might happen at what time, but you can make sure your family is taken care of and has what they need after you’re gone. Even a low-cost term insurance plan can help give your family peace of mind and help them take care of themselves.
Buying insurance policies is always a good idea, and it’s an effective way to protect yourself and your family. Use a life insurance calculator to help you buy the best life insurance policy you can afford. You can only have a safe and secure tomorrow if you plan it well.
