Life is unpredictable, and unexpected events can happen at any time. It’s important to be prepared for these events, which is why life insurance is so important. In India, there are many reasons why life insurance is essential. In this article, we’ll explore ten specific reasons why you need life insurance in India today.
- 1 Rising Cost Of Healthcare
The cost of healthcare is increasing in India. Even a short hospital stay can lead to high bills, which can put a strain on your finances. Having a life insurance policy can help you cover the cost of medical treatment, so you don’t have to worry about paying out of pocket. In addition to basic life insurance coverage, you can also purchase riders that cover specific medical expenses, such as critical illness or hospitalization. These riders can help you cover the cost of medical treatment, so you don’t have to worry about the financial impact of an unexpected illness or injury.
- 2 Growing Financial Responsibilities
Starting a family comes with many financial responsibilities, such as children’s education and marriage expenses. It’s important to plan for these expenses, and life insurance can help. With a life insurance policy, you can ensure that your family is financially secure, even if you’re no longer around. You can choose a policy that provides a lump sum payout or regular income payments to your beneficiaries, which can help cover their expenses and maintain their standard of living.
- 3 Protection Against Debt
Debt is becoming increasingly common in India, and it can be a burden on your loved ones if you pass away unexpectedly. With a life insurance policy, you can ensure that any outstanding debts are paid off, so your family doesn’t have to worry about paying them off. This can include things like mortgages, car loans, and credit card debt.
- 4 Tax Benefits
One of the benefits of having a life insurance policy in India is the tax benefits. Policyholders can claim tax deductions on premiums paid, which can help reduce their overall tax liability. Under Section 80 (80C) of the Income Tax Act, policyholders can claim deductions of up to Rs. 1.5 lakh on premiums paid for life insurance policies. In addition, under Section 10(10D), the death benefit paid to the beneficiaries is also tax-free.
- 5 Guaranteed Income
Some life insurance policies in India offer a guaranteed income to policyholders. This can provide financial stability and security, knowing that you’ll receive a steady income even if you’re unable to work. These policies are known as annuity plans, and they provide regular income payments to the policyholder or their beneficiaries.
- 6 Retirement Planning
Life insurance can be used as a retirement planning tool in India. Some policies offer a lump sum payout at the end of the policy term, which can supplement retirement income. This can be especially helpful for those who don’t have a pension plan or other retirement savings. These policies are known as endowment plans, and they provide both life insurance coverage and a savings component.
- 7 Peace Of Mind
Knowing that your financial future is secure can provide peace of mind. With an affordable life insurance policy like term insurance, you can rest assured that your loved ones will be taken care of if something were to happen to you. This can alleviate anxiety and stress, allowing you to focus on other things in life.
- 8 Inflation Protection
Inflation can erode the value of savings over time. Life insurance policies can provide protection against inflation through the inclusion of a savings component. This can help ensure that your savings keep pace with inflation so you don’t lose purchasing power over time. Some policies also offer the option to increase coverage over time, so you can ensure that your coverage keeps up with the rising cost of living.
- 9 Coverage For Non-Working Individuals
Life insurance policies are not just for working individuals. Non-working individuals, such as homemakers, can also benefit from life insurance. If a homemaker were to pass away unexpectedly, it could put a financial strain on the family. Life insurance can also help cover the cost of household expenses, such as childcare and cleaning, so the family can continue to function without interruption.
- 10 Support For Charitable Causes
Some life insurance policies in India also offer the option to support charitable causes. Policyholders can choose to donate a portion of their policy proceeds to a charity of their choice. This can provide a way to give back to the community and make a positive impact on society.
In conclusion, life insurance is essential in India today for many reasons. It can help cover the rising cost of healthcare, provide financial security for your family, protect against debt, offer tax benefits, provide a guaranteed income, be used for retirement planning, provide peace of mind, offer inflation protection, provide coverage for non-working individuals, and support charitable causes. With so many benefits, it’s clear that life insurance is an important investment for your financial future.