You can see a number of insurance providers offering lucrative coverage with a promise to secure finances not only for you but also for your family. But should you actually consider life insurance? Here is a little clue. Your decision to opt for life insurance would depend on different parameters, such as your priorities, individual circumstances and financial goals. Here’s more in this regard.
The Advantages
Having a life insurance policy would assure financial security to your family in case you don’t make it to a long life. So even in your absence, the loved ones can maintain a dignified living with the sum assured. Also, as the main breadwinner of the family, your life insurance can be a way of income replacement. It is also a potent savings component. Certain plans have endowment plans and whole-life plans. Such insurance products can help you enjoy a lump some amount over time. This can help to cover some major expenditures that you might need to bear in the future. Moreover, the premium of life insurance might be tax-deductible. This helps in reducing your sources of taxable income.
The Disadvantages
At times, your insurance policy can be costly. This is more so if you are buying a policy at an advanced age or if you have some pre-existing health conditions. Again, understanding the terms and conditions of these policies can be confusing. Navigating through intricate matters can pose a challenge in choosing the right policy. Also, having a life insurance policy means that you have to commit to paying a definite amount for premiums for a pre-decided period. This can be a financial burden in the future, especially if you don’t have a steady source of income.
When to Consider?
A life insurance policy can be an ideal choice, especially when you have dependents, such as elderly parents, children and spouses. It can also help you with some extra income over time if you are the main breadwinner of the family. Moreover, it can be an ideal choice in case you have debts outstanding, such as personal loans or mortgages. Your insurance policy can be helpful in settling such an outstanding amount.
The bottom line is to access your unique preferences and, compare the different types of policies, judge factors like sum assured, premium, inclusions and exclusions in the policy and coverage before signing up for life insurance.