A recession is predicted to happen in 2023 which is already being reflected in market volatility. In this situation, if your financial dependents lose your support due to your sudden demise, household expenses and payments to creditors can become difficult to manage. Even if they earn money, they can have the risk of being unemployed in this scenario.
In the event of your unfortunate death, your loved ones may not have quick access to your existing assets. The probate process can take a long time even with a valid will. A life insurance policy doesn't always need to undergo probate when the policyholder pays it directly to the nominee. Depending on his/her convenience, the beneficiary can receive the death benefit as a lump sum payout or regular income. This can help the person meet his/her financial needs without much hassle. But what kind of life insurance should you consider? Term insurance can be a good option since it is the most affordable kind of life insurance with low premiums against a high cover. That's because it is a pure risk protection plan that solely offers a death benefit if the insured dies within the policy term. That being said, here are some all-time reasons to buy term life insurance that also apply to 2023. Financially Protecting Your Family in Your Absence Your financial dependents will remain dependent on you even after your demise and you need to take a step now to keep them financially secure even after you are gone. They may need to replace the lost income to meet regular needs or your spouse may need some financial security to maintain her quality of life. In this case, regular payouts received from a term life insurance policy can help finance those needs. Dealing with Debt If you die in debt, the burden can fall on the shoulders of your family members. But if they have always depended financially on you, they won't be able to manage the debt. It can be anything like a loan on a credit card, personal loan, auto loan or home loan. However, the payout from a term life insurance policy can help your family clear the existing debt and focus on their own needs. Helps Achieve Long-term Goals Since a term plan offers the flexibility of choosing between regular payouts and a lumpsum payout, the beneficiary can choose the latter to achieve any long-term goal after your demise. This could be financing your child's higher education, your child's marriage, a long-awaited foreign trip, buying a new house and so on. If you choose the best term insurance plan, you can not only get a high cover but also useful riders like those for disability and critical illnesses at a nominal cost. You can also get tax benefits by buying a term plan. The premiums qualify for a tax deduction for up to ₹1,50,000 in a year under Section 80C. The tax benefits also extend to the death benefit that is paid to the beneficiary.
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