As the breadwinners of our family, it's always our goal to provide the best possible lifestyle to our family and help them fulfil their dreams by giving them quality education – all of which is challenging but doable when we are present.
But what about the times we are not? Life is uncertain. That is why it's essential to be financially ready when the time comes for the sake of our family. But how do you do that? By having sizeable savings plus? Yes, but coupling it with life insurance plans as well to ensure complete financial backing.
Let's dwell on the importance of life insurance plans in length.
Doesn't matter if you are young or in the best of your health; life can surprise you in the most mysterious and unpleasant ways. Critical illnesses, accidents or medical emergencies are common – regardless of age. No one can predict them, but there's no harm in being prepared for them. Life insurance plans can give your family a financial quilt if, god forbid, such an uncertain event strikes.
As a death in the family can leave a financial blow on the dependents, life insurance plans can come to their rescue by lessening the blow. They promise financial security for your family in the event of your unfortunate death.
Wondering about what will happen to your family when you are gone is a subject of worry for the breadwinner who wishes to provide a financial cushion to their family. However, when you know your family is financially secure, even when an uncertainty such as death strikes, you can live your life in peace. In addition, you can attend to various other crucial aspects of life by preparing for them. One such aspect is retirement. Knowing your family is financially taken care of, you can accumulate funds for your retirement.
Apart from promising financial security to your family during your absence, life insurance plans can help you meet your long-term savings goals. Some life insurance plans provide you with both death benefits and survival benefits. If the breadwinner dies during the policy term, the nominees are entitled to a death benefit. However, if the policyholder lives through the policy term, they are entitled to a survival benefit. The survival benefit can be bonuses, guaranteed additions or total premiums paid by the policyholder, depending on the kind of life insurance plan chosen.
Loans and liabilities, if not paid on time, can be a burden on those who are left behind, ultimately worsening the financial strain that comes with the death of the insured or the policyholder. The pay-out offered by life insurance plans can help the family pay the loans and liabilities and stay stress-free.
If you are searching for legitimate ways to save taxes, we got you one – life insurance. As per Section 80C of ITA, you can claim a tax deduction on life insurance premiums up to the limit of INR 1,50,000. This means you do not need to pay taxes on the premiums paid.
In addition, the pay-out paid by the life insurance plans is also free of tax. This means your family gets the lump-sum or staggered amount (as determined by the policy) without any tax deductions.
Life insurance plans are definitely an investment you make into your family's future. Interestingly, just like any other investment plan, it also provides returns. In other words, the death pay-out is significantly higher than the amount of premium you pay.
The Bottom Line
Whether you are in your 20s, 30s or 40', life insurance plans are a necessity if your goal is to create a financial net around your family in the face of uncertainties such as death. So, if you haven't purchased life insurance plans, what are you waiting for?