Life insurance is a financial protection against contingencies related to human life, such as death, disability, accident, retirement etc. There are risks of death and disability associated with human life due to natural or accidental causes. There is loss of income of the family when a person dies or becomes permanently or temporarily disabled.
Although human life is precious, a sum of money can be determined on the basis of loss in income for future years. Therefore, in life insurance, the maturity/fixed amount (or the amount that is guaranteed to be paid in the event of a loss), is a kind of “profit”. Life insurance products provide a fixed amount of money in case the life insured dies or becomes disabled due to an accident during the policy term.
Why you should buy life insurance:
We all carry the following risks:
Life insurance is necessary because:
- To ensure that your personal family gets some financial support in the event of your demise
- To finance your children’s education and other needs
- To adopt a savings plan for the future, so that you have a regular source of income after retirement
- To ensure your extra income in case your income is reduced due to critical illness or accident
- To meet other financial contingencies and lifestyle needs
Who needs life insurance: Primarily
any person whose support is necessary for his family and he earns income, life insurance is necessary for him. In view of the economic value of the contribution made by the housewives to the family, they also need life insurance cover. Life insurance may be considered essential for children as there are risks attached to their future income prospects.
How Much Life Insurance Is Required:
The amount of life cover you need depends on several factors such as:
- how many people depend on you
- What kind of lifestyle do you want to provide to your family?
- How much money will you need for your children’s education
- what are your investment requirements
- How much can you invest?