Do you know why life insurance is important for every single person? It is because, in today’s uncertain world, life insurance is a legal contract between two parties (insured and insurer) in which the policyholder i.e. insured agrees to pay the premium and in return, the insurer covers for the policyholder’s life.
In today’s era, everyone should have a life insurance plan. In today’s post, we will discuss what life insurance is, it benefits and its importance.
What Is Life Insurance?
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Life insurance is a legal agreement between the insured and the insurance company under which the insured fills the fixed premium and in return, the insurance company provides protection for his life. During the term of the policy, if the insured dies, in this situation, the life insurer gives the sum assured fixed to the nominee fixed by the insured.
Life insurance policy is a certain insurance plan that covers the policyholder’s financial risk in the event of a person is not living. Suppose a person has bought a house with a home loan. Her children are studying in a private school. The family is dependent on that person for all the expenses of the house.
If this person dies due to illness or accident, then in case of his non-existence, his family should not come on the road. That is why life insurance is important to buy. In the absence of taking insurance coverage, his dependent will get compensation from the insurance company, which can easily pay off all the necessary debts.
Who Needs Life Insurance?
- Life insurance is important for a person who is primarily responsible for his family’s needs and earns that income.
- In view of the economic value of the contributions made by the housewives in the family, they also require life insurance protection.
- Being risk associated with future income prospects of children, life insurance can also be considered necessary for them.
Life insurance also benefits in full disability and maturity.
Benefits Of Life Insurance:
Let’s now know the benefits of a life insurance policy to know completely why life insurance is important to buy. Check out the benefits of life insurance and understand exactly why life insurance is important.
- It covers the situation of accident or risk
- In the event of death, the nominee gets the sum assured so that he can spend the rest of his life well
- Even after your unfortunate death, your family will not face an economic downturn and this thought will give you peace of mind
- It is a safe investment in which the benefits are fixed
- If there is a plan with an investment component, then you can get the benefits of this plan even after you close the policy
- You can avail a certain amount of loan from your life insurance plan whenever needed
- Some life insurance plans also come with bonus or dividends
- Through your life insurance plan, you can get tax benefits
- By investing in life insurance, you also contribute to the economic development of the country.
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Why Life Insurance Is Important?
If you are wondering why life insurance is important then let me tell you that it has many aspects and many benefits. So, let’s now know why life insurance is important:
Protects Your Family Financially In Your Absence:
Insurance plays a very important role in life. We are always surrounded by accidents; whenever we go out we see how many accidents happen and how many people are killed. Who knows when we become a victim of an accident and our uncertain death?
In the event of death, the person goes away, but if he is the only earning member of the family, the family comes under financial burden for a very long time. However, if you had life insurance then it can help your family in your absence. That is why life insurance is important.
Pays Your Debts In Your Absence:
In case of your unfortunate death, the insurance company takes responsibility to pay off your debts for your family and thus the insurance company lessens your family’s burden in your absence.
Other Essential Of Life Insurance Policy:
- The insurance policy makes sure that your family gets some financial help in the event of your demise
- It helps your family by financing your children’s education and other needs
- The life insurance plan also ensures you to adopt a savings plan for the future, so that after retirement, you get a regular source of income
How Much Life Insurance Is Required?
The amount of life cover you need depends on many factors such as:
- How much can you invest?
- How many people are dependent on you?
- What kind of lifestyle do you want your family to provide?
- What are your investment requirements?
- How much money will you need for your children’s education?
You can seek help from an insurance agent or broker to understand your insurance needs, and to get the correct type of cover.