Deciding whether you need a life insurance or not, can be a difficult task. This can be all the more difficult if you are young, as the myth has it that young don’t really need to invest in one. Well a life insurance has more benefits that just covering the potential risks to your life. Not being aware of these benefits leads to the fact that many refrain from buying a policy. If you fall in that category, here’s why you should buy life insurance –
Ensuring financial security for your dependents –
In case you have a family dependent on you for financial needs, there’s not better reason to justify the need of alife insurance. A life insurance policy, on the death of the insured hands over the entire sum assured to the nominee of the insurance. This amount serves as an income replacement that the deceased would have brought in case he was alive. It ensures your family is financially secured even in your absence. While nothing can be done to replace the emotional loss, financial assistance by the policy helps to stabilize the condition.
Avail a lot of options –
When you buy life insurance, you have a lot of options to customize your investment. First of all there are different kinds of life insurance products that you can invest in like term life insurance, ULIP, whole life insurance etc. Plus you even get the flexibility to choose the number of years you want cover for, the sum assured you want and the style of payment for the number of years you need to pay premium. In this way you can customize the policy as per your requirement.
Insurance is a good form of investment as well –
If you don’t have a big risk taking appetite and want a regular investment plan for long term, thenlife insurance is a good option for you. When you buy life insurance you avail a systematic process of long term saving along with a life cover. This is a great option for young professionals as it gives them a safe gateway of investing in stocks, bonds and mutual funds. With this kind of an investment, your cash value increases quickly without much risks. You can even choose a guaranteed minimum death benefit and limit the risks of investment.
Use life insurance to pay off loans –
Some life insurance plans offer you the facility to avail mortgage on it and pay of your outstanding loan. Also, in case of death of the insured the policy money is used to pay of the outstanding loan amount and rid the family of the financial burden. When you buy life insurance, make sure the policy includes the feature of availing loan on it, this will only increase your options to arrange funds when required.
Why buying a life insurance is a sensible decision