Should I Buy Whole Life Insurance?
If something unfortunate happens to you, wouldn’t you like to ensure your loved ones are financially protected? If you are the sole breadwinner of your family, your demise could probably leave them in a financial lurch. This is where whole life cover comes into play.
When you have a whole life insurance policy in place, your dependents stand to receive the death benefits if you pass away during the policy term. The payout will help your family make ends meet, without making any compromises in their standard of living.
If this is not enough to convince you to buy a whole life cover, here are some other reasons why you should give such plans a serious thought:
- Protection for life - With a whole life cover, you will be insured for your entire life. If you see to it that premium payments are made on time, you can be rest assured that your beneficiaries will receive the payout in the event of your demise. With such policies, death benefits are guaranteed and premium rates are generally fixed.
- Cash Value - Cash value is the monetary value of the policy issued to the policyholder at the time of cancellation/surrender the policy. As you make premium payments on a whole life cover, a portion of the payment goes toward your policy’s cash value. In case of ULIP plans, you can make partial or full withdrawal from the accumulated funds, whereas traditional plans allows you to get a loan (up to a limit) against the cash value of your policy.
- Legacy Planning - Legacy planning is the financial plan to give away one's assets to a dear post one's death. A whole life plancan contribute significantly in this plan as the policy is generally active for a person till age 99, hence at whatever age the person passes away (before 99), the policy benefits are paid out to the beneficiary as a parting gift from the insured member. No matter what’s hapepening on in the market, you can be rest assured of guaranteed returns.
- Tax Benefits - Did you know you are eligible for tax benefits when you have a life insurance policy? Although there are several modes to save tax, life insurance is among the most effective tax saving instruments. You can claim deductions up to Rs. 1,50,000 under Section 80C of the Income Tax Act, 1961 on premiums paid towards life insurance policies. Additionally, proceeds from life cover - maturity or death benefits - are exempt from tax.
You can never fully know what’s going to happen tomorrow. As a means to financially secure your loved ones if in case something unfortunate happens, it is always wise to have a life cover. Life insurance policies are one of the best financial safety nets one can get.