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Why is Life Insurance Important?

Published On Apr 06, 2021, Updated On May 03, 2021

The number of individuals dying at a young age has grown dramatically over the last five years. A life insurance policy would help you protect the security of your loved ones and help them cover their financial costs such as debts, pay off the loan and retain a good quality of living if anything were to happen to you, you are the only income member of the family.

Must Read: What is Life Insurance?

Why is Life Insurance Important?

In the case of your untimely death, life insurance is a key security coverage for your loved ones. But there are several other reasons why a life insurance policy is necessary, besides offering financial assistance. 

Read on to understand the major reasons why investing in a life insurance policy is paramount for all.

1. Meet Your family’s Needs

One of the most prominent life insurance advantages is that, even though you are not alive, it helps you protect the financial interests of your family. Life insurance plays an important part in this; death payments will assist them to take care of their expenses such as child tuition, paying off a mortgage loan, etc., and have financial security without losing their lifestyle.

2. Protect Your Business

Life insurance is not just for your family and yourself. Your business is also taken care of with certain insurance plans. If you own a company, without any hassle, your business partner will buy your portion of the business. Your business partner(s) will enter into a purchase-sell deal and the pay-out would go to the beneficiaries of the deceased partner, but without giving them a shareholding in the firm. 

3. Helps Settle Debts

During a tragedy or your death, you do not want your family to struggle with financial obligations. If you happen to obtain the correct life insurance policy, all your unpaid debts such as a personal loan, car loan, house loan, or a loan on credit cards will be taken care of.

Also Read: All About Life Insurance

4. Support Your Retirement Plan

It is the inherent desire to have a decent retirement plan for all. By investing in some good life insurance policies, you can fulfil this aim. There are some life insurance policies which offer regular income on a monthly basis, after your retirement.

5. Tax Benefits

No matter what kind of life insurance policies you purchase, taxes will be saved. The premium charged for life insurance is eligible for deduction up under Section 80C of the Income Tax Act. Even under Section 10, the death benefit or maturity is exempt from tax (10D). 

Take Away

Death is inescapable. The least you can do for your family in the event of emergencies and tragedy is to protect their financial future. Life insurance is a perfect asset for both protection and helping you save, contributing to the formation of a successful corpus in a disciplined manner.

Must Check: Here is Your Guide To Different Life Insurance Plans

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