If you are amongst those, who cannot decide whether to buy a life insurance or not, here are the six inevitable consequences of not having a sufficient life insurance cover:
- Leaving your family in a financial crisis
As per statistics road accidents alone claim around 400 lives every day. Beside road accidents, there can be life-threatening diseases, natural and man-made calamities, plane crash etc. that may force you to leave your loved ones forever. If you are the sole breadwinner of your family, your family members will end up in a terrible financial crisis. You will never face the biggest consequence of not having a life insurance, but your loved ones will. Buying a comprehensive term insurance plan will provide financial security to you and your family members at very low premium rates.
- 2. Leaving your family in debts
You would not want your family to be repeatedly harassed by recovery agents in your absence. Your outstanding loans can be taken care of if you happen to buy the right life insurance plan at the right time. Even if you don’t have an outstanding loan, your death may compel your family to have one. You can avoid your loved ones to be burdened with such financial liabilities by getting a sufficient life cover.
- 3. Being unprepared for upcoming expenses
Your financial goals like starting your own business, buying a house or a new car will need funds. These funds can’t be generated in one go! Life insurance plans also cater to your need for saving. There are guaranteed return plans which help you save for your future financial goals along with a life cover that can secure your family’s future in your absence. These plans also provide you with accrual additions which acts as a bonus for the number of years you have invested.
- 4. Leaving your child’s future uncertain
The education sector in India, as we all know, has faced revolutionary changes in the past few years. In one hand, the quality of education in India has improved whereas, on the other hand, it has the cost of higher education has skyrocketed. As a parent, you would wish to send your child to one of the top education institutes in the country. But have you ever thought how insecure your child’s future will be in your absence? Who will look after your child’s educational expenses? Do you want your child to compromise on his career goals? The best solution to combat this uncertainty is again life insurance. You can look for a child educational plan that will not only help you accumulate wealth for your child’s educational goals but also take care of all the financial needs of your child, even in your absence.
- Being financially dependent on your family post retirement
While retirement brings the golden years of one’s life, it can also the end your financial independence if not planned well. If you don’t wish to be a burden on your family members, you must start saving for your retirement as soon as possible. Investing in the right retirement plan will ensure a steady income flow for you and it will also offer substantial life insurance coverage. The right approach towards retirement planning would be investing a certain amount regularly for a longer duration. This will help you grow your money as it will compound as years pass by, you will also enjoy additional bonuses and tax benefits right from an early stage.
- Not Being Able to Save Taxes
You work hard every day but when you receive your salary, a huge amount is already deducted. If you want to increase your take-home salary, you must save income taxes as much as possible. One of the advantages of buying a life insurance is that it offers Income Tax benefits under section 80C of the Income Tax Act of 1961. Unlike other investment options, even the maturity benefit, which you will receive after the policy ends, is non-taxable under section 10 (10D)
There are various types of life insurance plan available in India. Be it a term plan; Unit Linked Insurance Plan or an Endowment Plan life insurance can serve as a solution to all your financial needs. Amongst the various available options, you must choose the appropriate plan according to your insurance needs.