How Life Insurance Assists You In Long-Term Financial Security

Time and again, you must have been advised by your parents or relatives about securing your future financially. From investments to life insurance, they must have pushed you to consider these critical aspects of financial planning to safeguard your future. And, why not!

Today, most young adults, mainly millennials, believe in the mantra of ‘You Only Live Once’ or YOLO. In their endeavour to live in the present, they indulge in adventurous, unhealthy, and sometimes life-threatening activities. Moreover, the rising stress levels, long work hours, and sedentary lifestyles are major causes of increasing chronic health conditions. Although there is nothing wrong with living in the moment or working hard to fulfil your dreams, ignoring the idea of securing your future with a life cover policy might be costly.

As a young adult, death feels like a distant event. But, a sudden accident or diagnosis of a serious illness doesn't come with a warning, leaving your family and children in a lurch. In times when unpredictability has risen beyond imagination, life insurance is a necessity. Long term insurance not only supports your family in your absence but also assists you in achieving financial security through savings. In addition, it comes with a plethora of advantages that are mentioned below. 

 

Benefits of Life Insurance to Become Financially Secure

1. Life Cover Policy Replaces Lost Income

As its name suggests, a life cover protects you and your family against the consequences caused by the risk to life. In the event of your untimely death, your spouse and children can be left in a financial struggle. It is especially true if you are the only income earner in your family.

In insurance coverage, your family receives a payout called the sum assured if you happen to die unexpectedly. In addition, several insurance policies provide an option of income payout. These long-term insurance elements enable your spouse or dependents to replace the lost income, which helps them meet the day-to-day expenses and carry on with their plans.

2. It Helps Accumulate Wealth

Life insurance is not restricted to a death benefit. Several insurance policies carry a savings component, such as an endowment plan, a unit-linked insurance plan, or a retirement plan. Such policies let you accumulate wealth to fuel important milestones and dreams.

For instance, an endowment plan lets you save over a period of time. You then receive the amount as a lump sum benefit at maturity if you survive the policy term. Unit-linked plans or ULIPs help you invest in your choice of market securities to increase your wealth.

These features are in addition to the financial security the plans provide. You can build a habit of disciplined and regular savings while getting life cover from day one of the policy.

You might have various goals ranging from buying a house or starting a business to enjoying a peaceful retirement. So, choose the best life insurance policy depending on your goals to accomplish them.

3. Secures Your Child’s Future

When you have children, they become your topmost priority. Be it about fulfilling their regular wishes or protecting their dreams, and you work hard to make it all possible. Investing in a life cover policy is the best way to ensure your little one’s dreams are taken care of when you are not around.

Whether you want your child to pursue education overseas or want to save for their marriage, savings insurance policies help you plan for these crucial milestones. Most insurance plans come with the waiver of a premium rider^#. It waives off all future premiums in case of your demise or permanent disability. So, your child is not burdened with life insurance policy premium payments, especially if they are the beneficiary.

4. Reduces Tax* Burden

One of the biggest benefits of life insurance policies is the tax* benefits you can reap by investing in them. The Income Tax Act 1961 provides Section 80C to help salaried individuals save taxes* on their hard-earned money. You can claim up to Rs. 1.5 Lakh of tax* rebates under section 80C, which includes investment in insurance plans.

A life cover is considered to be an ideal investment option for tax* savings. Be it a term policy, income plan, or ULIP, they all come with various tax* exemptions and deductions.

For instance, ULIPs carries an EEE, which is the exempt-exempt-exempt tag. It means that your life insurance policy premium to maturity proceeds are all exempt from tax*. Saving on taxes* helps you accumulate some money towards your goals. So, here’s another reason how insurance helps secure you financially.

5. Provides Safety Against Various Uncertainties

Death is not the only risk you face against which you want to secure your family’s financial future. Other threats to your being can result in a financial crisis for your near and dear ones. It includes serious illness, permanent disability due to an accident, paralysis, etc. Let’s say you face an accident and suffer a disability, which doesn’t allow you to work, earn, and provide for your family. Your loved ones have to take care of your medical expenses and deal with everyday financial needs.

Life insurance policies come with rider^# options, including accidental death and disability, supporting your family financially in such situations. Many insurance plans also provide critical illness cover as a part of it or as a rider^#, which decreases the burden of medical costs if you are diagnosed with any serious disease.

 

Conclusion

As you can see, life insurance is a great tool that guards you financially and also assists you in fulfilling your dreams. TATA AIA offers a range of insurance products from term to income plans. Click Here to Know More.

Tata AIA insurance payment in terms of an income or a lump sum benefit will help you give your family a happy, safe future.

 

L&C/Advt/2021/Sep/1575