Life insurance is a contract between an individual and an insurance company. It protects the nominees of the insured in case of an unfortunate death. Insurance literacy in India is low due to which there is a reluctance to buy life insurance plans.
However, things are changing slowly in the country. If you are someone who has not invested in life insurance, explained ahead are the consequences of not having such an insurance plan.
- Leaving the dependents in a financial crisis
One of the top benefits of life insurance is that it provides financial security to your loved ones when you are no longer around. If you do not have a plan, your loved ones will have no financial safety and end up in a terrible crisis.
- Your family will be in debt
In case of an unfortunate demise of the breadwinner, the family members end in a debt trap. Certainly, this is something that you do not want for your loved ones. Any loan can be taken care of if you have invested in the right type of insurance plan. If you do not want to burden your family with your debt, a life insurance plan is essential.
- Unprepared for huge expenses
If you want to start a business of your own or have planned to change your job, financial security is something that will stop you. Without the necessary financial back-up, it is not a good idea to leave a job. Besides a change in job, there are other milestones in life like wedding, the birth of a child, and a dream foreign trip. A suitable life insurance plan such as a money back insurance plan can help tackle these expenses with ease.
- Your child’s future will be unsecured
As a parent, you want to send your child to a reputed school so that he/she has a bright future. The cost of education is constantly rising and if you do not plan beforehand, your child’s future will remain insecure. A life insurance plan will help your child transform his/her dreams into reality even when you are not around.
- You will be dependent on others after retirement
Once the regular source of income stops, you will have to remain dependent on others for finances. If you buy life insurance now, you are already planning for your retirement. Choose a retirement plan to take care of all your post-retirement financial needs. In case of an unfortunate incident, your dependents will receive a death benefit.
- Unable to save on taxes
The last reason why life insurance is important is to save taxes. Undoubtedly, you do not want to lose your money in income tax. Therefore, you need to try to save as much as possible. The amount invested in the life insurance premium is eligible for a deduction under Section 80C of the Income Tax Act, 1961. You can claim a deduction up to INR 1.5 lakh under this section.
Consider these consequences and remember to buy a life insurance plan well in time. It is not only for yourself but also for your loved ones.