Finance

Importance of Life Insurance and Do You Really Need It?

Cambridge Semantics

We see hundreds of advertisements talking about the importance of life insurance. There are various life insurance companies telling us about affordable life insurance policies. It comes in handy to support the family especially if the breadwinner has passed away.

But, Is It True?

Life Insurance- is it needed?

Before spending your hard-earned money on buying a policy, you should know the importance of insurance. There are different, types of insurance life term insurance, health insurance, travel insurance etc but the first step before taking a dip would be to see which insurance you need.

Once you have finalised that, it’s time to choose the plan that works for you. We are talking about life insurance here, so let’s talk about that further.

The importance of life insurance is known by many but, it’s still not for everyone.

Surprised?

But before you buy any life insurance, make sure to check things like- how does life insurance work, what does life insurance cover etc. We are going to write a blog soon covering these points, so you can check there as well.

Primarily, you need life insurance if someone is financially dependent on you or your financial chunk would help to cover important things like education, marriage, illness, etc. You don’t necessarily need life insurance, if you are single, don’t have anyone counting on you for money, have no large debts, etc.

Needs of Life Insurance

In my opinion, Life insurance provides a financial cover and is good in certain scenarios. 

Firstly

As a parent, the importance of life insurance is prime in your life. You would need a monetary nest if you have a small kid, a school or college-going kid. Time flies so proper economic planning is a must. Insurance should be able to cover all their financial self-sufficiency.

Secondly

If someone is unwell or fighting/recovering from any disease that requires regular medical attention. Medical costs may burn your pocket quickly and before you realize it, it may exhaust your complete savings. Sadly, in these adverse circumstances, the demise of the main earning member can cause a huge economic and emotional agony to the family. Well-planned coverage may reduce their financial strain.

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Thirdly

Business owners with large debts, unpaid employees’ salaries can benefit from insurance. Without life insurance to pay off the debts and salaries, the owner’s heirs/heiress may find it difficult to keep the company afloat.

Companies often insure the lives of the key employees without whom the firm may crumble. It is also used to fund the “buy/sell” agreement, which specifies that the estate of the deceased will sell and the surviving partners will buy the decedent’s stake in the company.

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Fourth Requirements of Life Insurance

People with large properties where the assets cannot be easily liquidated. This is a rare scenario but may happen. It usually applies in the farming sector where 100% of the value of the estate is in the land. To pass the land or business to the heirs, it is imperative to have life insurance to cover the estate taxes.

LIC - Life Insurance Corp

LIC Policy (Life Insurance Corporation of India) is one most popular insurance companies in India but since 2000, many other insurance companies have created a name for themselves. We will talk about them further in the blog.

Everyone should know the importance of insurance but one shouldn’t put all the eggs in one basket. Diversify your finances as per your needs and take the appropriate insurance policy- life insurance, term insurance, health insurance, etc.

Types of Life insurance Policies in India
Image Courtesy: paisabazaar.com

Insurance also invests in other short-term and long-term investment plans like mutual funds, shares, fixed deposits, post-office schemes like NSE, etc. As I said, investment depends on an individual’s needs, financial responsibility, and conditions among others. Hence, proper planning, research, and calculations are vital before making financial decisions.

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Make yourself financially literate to enjoy the fruits of your hard work. There are many affordable life insurance policies in India. Understand the importance of life insurance and if it’s suitable for you. So, do not hesitate to contact a financial advisor as they know the market well. They will tell you the benefits of insurance as well as guide you with the best-performing insurance plans for covering a life risk.

Insurance Service Provides in India

Here are our curated list of the best term life insurance plans in 2022

  • Aditya Birla Sun Life Protector Plus Plan
  • Aegon Life iTerm Plan
  • Aviva LifeSheild Advantage Plan
  • Bajaj Allianz eTouch Lumpsum
  • Bharati AXA Term Plan eProtect

Check each insurance feature, benefits, policy term, etc., and make a wise and well-informed decision matching your Need for Life Insurance.

revampmind-founder-Nitya-Rambhadran-1

About Nitya Rambhadran

Nitya Rambhadran is a founder of Revamp Mind | Blogger | YouTuber | Freelance Marketer | Copywriter. She is an aspiring Motivational Speaker, Author, and Thought Leader. Motto in life- Grow and make a difference in other lives as well. Cheers!!
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