The future is something that can’t be predicted, and the fear of the unknown always prevails in the mind of individuals. Therefore, a strong future plan is essential to leave support for your family in the event of your unpredicted death. A life insurance plan can immensely help in this regard. It offers financial security for your family and helps them cover mortgage payments, living expenses, and educational costs.
Most people tend to ignore the importance of a life insurance plan and regret it later. However, if you are still pondering the importance of life insurance or a term insurance plan, here are the top five reasons to support your query. But before that, let’s start from the basics, with what a life insurance plan is all about.
About Life Insurance Plan
Life insurance is a contract between an insurance company and an insurance policyholder who accepts the payment of a regular premium against a lumpsum amount, also known as the death benefit, which must be paid to the policyholder’s beneficiaries against any unexpected death.
4 Reasons Why Having a Life Insurance Plan Is a Must
Provides A Solid Financial Security:
One of the most important reasons behind opting for life insurance is that it offers an all-encompassing financial security to the policyholder’s family. In case of an untimely death, a life insurance plan proves beneficial in covering any outstanding debts, student loans, mortgages, and other relevant expenses, if any.
Provides Tax Benefits:
If you tend to disregard all the other reasons, this solid reason will make you think twice. We all look for ways to pay less taxes; a life insurance plan will help you save havoc on your taxes. Buy term insurance and receive outstanding tax deductions on the basis of the payable premiums.
Provides Peace of Mind:
We don’t want our loved ones to fall in trouble because of our unexpected death. Isn’t it? We often become preoccupied with what will happen to our loved ones and how they will manage their finances. An insurance plan will offer peace of mind to the policyholder if they are the primary breadwinner of the family.
Act As a Protection to Your Business:
For business owners, life insurance or term insurance plans act as a blessing as it helps in paying off business debts, if any. Therefore, it can protect the business at the time of the unexpected death of the owner. It can also be used to provide a buyout to the existing business partners, ensuring smooth business continuity.
It is also essential to remember that life insurance plans are usually cheaper and more affordable if done earlier. This is primarily because of the power of compounding, where the policyholder pays a minimum amount of premium for an extended period to receive a lump sum benefit later.
As financial planning is imperative, it is essential to buy term insurance plans according to the needs and financial goals. There are innumerable companies available in the market that offer customized insurance plans according to the necessity of the customer. It would be wise to talk to an expert and finalize the decision. Finally, make sure that you purchase an insurance plan from a reputable company that offers varied benefits.