6 Reasons Not To Quit Life Insurance
Updated On Sep 04, 2021
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Life is unpredictable. You never know what may happen in the very next moment and change everything around you. Ensuring financial security of self and loved ones in case of a mishap is something that revolves around the mind of every individual. What keeps the stress of financial instability at the time of life uncertainties like death, accident or disability is life insurance.
If you already have a life insurance policy, ideal as per your needs, rest assured you are on the right track. However, if you are planning to quit your life insurance policy for any specific reason, it’s time to think again!
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6 Reasons You Should Not Quit Life Insurance
Life insurance is nothing less than a boon. It keeps you and your loved ones free from concerns of any kind during a life-altering event. Below mentioned are 8 prime reasons that make life insurance a must for you.
Financial Security for Family
There are multiple expenses associated with daily life. Home rent, children’s school fees, EMI’s are a few expenditures that one has to manage in order to maintain a smooth life. In such a situation, an unexpected demise of the earning member of a family can put massive financial pressure on the other members. In a case like such, life insurance acts as the ultimate savior by protecting the family members in terms of finance. Quitting the policy in between may not help out your loved ones if something unfortunate takes place, so it is a must for you to continue your life insurance.
Planning life insurance cover at the right time prevents one from the hardships that they have to face otherwise. Since life insurance provides the best risk cover against accident or illness and that too at a lower premium amount, it is a must to continue with it.
In case you decide you quit your life insurance policy in between or say before completion of the term period, you will have to bear surrender charge. If new to the term, know that surrender charge is the fee levied on a life insurance policyholder upon cancellation of their life insurance policy.
Life insurance policies provide dual tax benefits, as per Section 80C (tax deduction up to 1.5Lakh) and Section 80D (no tax payment for matured amount). Cancelling the policy mid term may result in loss of all tax saving benefits.
A policyholder can take a loan against life insurance policy. What’s best is that the interest rate charged against the life policy is much lower as compared to a personal loan. Also, keep in mind that the more number of premiums of your policy with more amounts you have paid, the less would be your rate of interest for loan. So, quitting life insurance policy in between is not advised.
Assured Income After Retirement
Life insurance policy offers the benefit of assured income in the form of annuities to the policyholder and their spouse. So, other than saving you from life risks, life insurance can also help in supporting you after retirement if you survive its maturity period.
Also Read:- Tax Benefits Under Term Insurance in 2021
Now that you know why cancelling your life insurance before its term period may be a bad decision, make sure you continue your policy and avail all its benefits. Remember, this would be one of the best decisions you would make regarding securing the financial future of your loved ones and yourself.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.