The importance of investing in life insurance cannot be stressed enough. Life insurance is designed to offer financial safeguards against death of the policyholder and also works as a good investment plan, which helps you meet several life goals in turn. The life insurance sector in India has been witnessing steady growth as more and more people are waking up to the necessity of investing in life insurance plans. The life insurance industry posted growth of 12% between April 2016 and March 2017 with premium income touching Rs.105.26 billion in this period.
There are approximately 360 million policy holders in India and counting. However, the insurance sector is poised to witness at least 12-15% of growth over the next 5 years, which clearly indicates that a large chunk of the population is still not covered by life insurance. In spite of being a highly populated country, the Indian insurance sector accounts for only 1.5% of the total insurance premiums globally. This clearly indicates a pressing need for insurance coverage for a majority of the Indian population.
In case you are considering a life insurance investment, here are 5 top reasons to do so:
The younger you buy, the cheaper your insurance plan
Life insurance plans will be considerably cheaper when you invest in the same at a young age. The younger you are, the cheaper your insurance plan will be. Plan out the insurance coverage that you require even if you are currently single and do not have direct dependents. Single individuals often have to provide financial assistance to siblings or parents. Insurability is another factor worth considering. The younger and healthier you are, the more insurable you will be. You can thus get the best possible insurance policy rates.
Higher Savings on Taxes
You can expect tax savings with your insurance policies. The premium paid on life insurance policies is always eligible for the maximum tax deduction up to Rs.1.5 lakh as per Section 80C. You will also be eligible for tax-free proceeds in case of maturity/death under Section 10 (D) of the Income Tax Act of 1961.
You may not qualify for life insurance later
Uncertainties are a part and parcel of life. You may be healthy and fit at present and paying the life insurance premium may seem an additional expense. However, it is worth it, since you will not be allowed to purchase life insurance coverage if you fall ill later on. Buying life insurance early is highly essential before any chances of your health deteriorating later on.
Supplement Retirement Goals
Everybody wants healthy retirement savings, which last for a long time. With the right life insurance plan, you can actually earn regular income every month in the future. Investing money in life insurance helps you supplement your retirement targets.
Peace of Mind
What happens to your loved ones when you are no longer there? Death is an inevitable reality of life and we all worry about taking care of our families. Your family will depend on you throughout your lifetime and also when you are not there anymore. Invest in a good life insurance plan and put these worries to rest. Your insurance investment will take care of your family in any situation and will help in replacing lost household income, paying for the education of your kids or even providing financial security to your spouse if something happens to you.
Investing in life insurance should not be perceived as a burden but rather as a necessity, both for safeguarding you and your family from risks and also for ensuring greater peace of mind.