We all eventually die but no one knows for sure when they will die. But ignoring the reality that anything might happen to an individual which can result in his/her sudden demise can cost a family everything, especially when the demised member is the core earner within the family and he/she dies without insuring their family’s well-being. Therefore, buying life insurance is a very crucial financial decision in one’s life.

Even though no amount of money can replace someone’s life, the monetary support that one leaves behind in the form of life insurance. Before we go on to discuss the various reasons and benefits of having a life insurance policy, here’s an overview of ‘What is Life Insurance Policy?

What is Life Insurance Policy?

Life Insurance is a contract between an individual and an insurance company that allows the individual to leave a non-taxable amount for their loved ones, at the time of their death. This insurance can help the individual’s family members lead a quality life. The set amount of money goes to the nominee(s) appointed by the individual.

Reasons why everyone should have a Life Insurance Policy:

Everyone works hard each day just so that his/her family is financially secure. And life insurance is equally important when it comes to securing your family’s future financially, especially when you are young. Here are a few reasons for you to know how vital a life insurance policy is:

1. Financially secure your loved ones even after you are no more:

The first and foremost reason to have life insurance is that it is very helpful in securing your family’s financial needs in case of your sudden demise. While it can be very hard for dependents like your old parents, your wife and children to cope up with the daily expenses, life insurance can offer death benefits by providing them financial stability. Life Insurance can save the day for your surviving dependents.

2. Deal with debt:

There may have been times when you may have taken debts from close ones or banks or credit card bills, etc which you had to pay but couldn’t due to your death. However, no one would want their family members dealing with the debts when they are gone and again the right life insurance policy can take care of such needs.

3. Leave an inheritance:

Every parent wishes to pass on a part of their life-long success onto their children as an inheritance that can add more value to their financial security. While many may not have a business empire to pass on, a life insurance policy can provide significant monetary support to the beneficiaries that can be passed as an inheritance when you are gone.

4. Support Your Retirement Plan:

Life insurance can also be a long-term investment for you to save for your retirement and live a life without being dependent on anyone else. Many investment-linked policies provide regular income on a monthly basis.

5. Protect Your Business:

Many people don’t have the full knowledge of what life insurance policies cover. Life insurance isn’t just available to take care of you and your family, many policies that offer coverage to your business also. In case you own a business and suddenly something happens to you, a life insurance policy can help the nominees get their deserved pay-out from the business.

6. Peace of Mind:

No one knows how long will s/he live and as said earlier, even though no amount of money can replace the value of a living person, life insurance can bring you and your family a peace of mind that they are financially secure. It can serve as a shield against the uncertainties in life that otherwise may cause trouble to your family.

Words of wisdom:

Death is unavoidable and eventually everyone dies no matter what they did in their life. But the value you created during your lifetime( both character and monetary) will pass on to your loved ones. While you may have taken care of passing a strong character to your loved ones, life insurance can ensure that you pass on a financial stability onto your loved ones once you are gone.