• Life cover:
The primary objective of life insurance is to cover your life. As a concerned person, you would always want the financial future of your loved ones to be protected, even if you aren't there to support them. And since life is unpredictable, it is very important to buy a life insurance plan and cover your life. If anything were to happen to you, your spouse and kids would never have to worry about their finances. This is the biggest reason why you need to include a good life insurance policy in your financial portfolio.
• Covers your debts:
Can you imagine what your family has to do to arrange the funds to pay off your large home loan if you die suddenly? A life insurance plan covers your mortgages and ensures that after your death, your family members are not forced to take up any such financial burden. This protects the overall financial stability of the family in the long run. This is another reason why life insurance is important.
• Helps you save:
If you invest in a good endowment plan
or even a ULIP
, you will get to save a lot of money. There is an added advantage of saving money in an insurance plan – you stay invested while your life is also covered. This dual benefit of life insurance makes it a standout investment option. This is a valid reason for you to include life insurance to make your financial portfolio a healthy one.
• Tax saving tool:
Under the Indian Income Tax Act, you can get a tax reduction under Section 80C of The Income Tax Act 1961 for the premium you pay towards your life insurance plan. There various other tax saving benefits
available with life insurance too. Tax saving is a priority for everyone. And since life insurance allows you to save a lot of tax in a legitimate manner, your financial portfolio must boast of a good life insurance plan.
• Protects your other financial assets:
You may have mutual funds, equities, fixed deposits, shares, bonds and even some cash in your financial portfolio. It is important to protect the portfolio with a life insurance plan. How, you may ask? Well, if you died suddenly and left your family without any financial backing, they would be forced to sell off the assets from your portfolio to make ends meet. This would prove to be disastrous and rob your family of the higher yields. So to prevent such a calamity from taking place, include a life insurance plan to protect the other components of your financial portfolio.