Life Insurance Importance
Why is life insurance important?
Life insurance is essential for you, as it offers your family a vital safety net in case of your untimely demise. It preserves your family's financial independence and enables them to maintain their standard of living without having to compromise on essential needs. Life insurance policies act as a protective shield in case of an unexpected incident to ensure that your loved ones are not left unsecured and can continue to thrive with adequate financial support.
Why Do You Need Life Insurance?
1. Secure your family's financial future
Life insurance is all about securing you and your family financially. All parents want their children to be taken care of even when they are not around. Life insurance makes sure your loved ones won't suffer financially in your absence.
2. Accomplish your financial goals
We all have some goals in life, for which money needs to be saved. Life insurance plans help you achieve those goals by helping you build a financial corpus with the protection of a life cover. Life insurance plans inculcate a habit of disciplined saving. Paying a little amount as an insurance premium each month will help you accumulate funds. What's even better is that this small monthly amount only keeps growing. So years from now, you'll have enough wealth accumulated to accomplish your more substantial and long-term financial goals.
3. Brings peace of mind
Having life insurance will give you peace of mind. Life is uncertain, and life insurance can offer financial assistance to your family when you are no longer around. You can also plan your retirement by taking a retirement plan where you will receive a monthly income.
4. Save tax
Generally, you can claim an income tax deduction on your life insurance premiums under Section 80Cof the Income Tax Act, 1961**. Pay-outs for death claims are tax-free under Section 10(10D) of the Income Tax Act, 1961**.
Reasons to Have a Life Insurance Plan
1. Long term financial goal
Life insurance plans help you create a substantial financial corpus for your long term financial goals by helping save money with the protection of life cover.
2. Protect the child's future
Every parent wants to provide their child with the best possible future. Life insurance plans ensure your child to have the best possible future even when you are not around.
3. Loans and liabilities
If you have bought a loan then you should always consider buying a term plan. It makes sure that the burden of your loan doesn’t fall up on your dependents in your absence. Term insurance plans are the most affordable way to protect home loan amount and safeguard the shelter of policyholder's family in case of his/ her untimely death.
4. Child’s education planning
Child education plans help you save and build a financial corpus for your child’s future education expenses. These plans provide life cover so that the child gets the sum assured even in the case of policyholder’s untimely demise.
5. Dependent spouse
If your spouse is financially dependent on you, then you must buy a life insurance plan.This will ensure that so that your spouse lives a financially independent life in case of your absence.
6. Leave a tax free legacy
As life insurance pay-outs are tax-free under Section 10(10D) ** of the Income Tax Act, 1961, you can leave a tax free legacy for your loved ones.
7. Retirement planning
Life insurance plans help you invest and build a financial corpus for your retirement so that you can live your post-retirement life comfortably
8. Tool for structured saving
Life insurance is a valuable financial tool that can help you establish disciplined financial habits. It makes you to commit to paying a regular premium payment to keep your policy active. This essentially makes you set aside funds periodically that accumulate over time and helps you prioritise your financial security. Moreover, life insurance policies often feature various investment options that offer higher incentives to save for the future. The importance of life insurance in this context lies in its role as a structured savings tool that helps you with long-term financial planning. Through consistent payments, you not only secure your future but also build a financial nest egg for your beneficiaries.
9. Optional riders
The option to add riders also highlights the importance of life insurance policies. Optional riders provide you with additional benefits and customisation options. Purchasing these optional add-ons helps you enhance your financial protection beyond basic life insurance coverage`. It also offers comprehensive protection and peace of mind to your family. Riders provide added flexibility to ensure that your life insurance plan adapts to your evolving life situations over the years.
10. Income replacement tool
The importance of life insurance is evident as an income replacement tool. In the unfortunate event of your absence, the proceeds from the life insurance can serve as a vital lifeline for your dependents. The payouts from the life insurance policy can replace the lost income and ensure the continuity of financial support for your family members. This can be particularly significant for the sole breadwinners of a family. Life insurance provides a safety net to the surviving family members and helps them maintain their standard of living, cover essential expenses and pursue long-term financial goals. It can be used to pay for loan repayments, educational expenses or daily living costs.
✅ Why is life insurance important?
Life insurance is important because it provides financial security to the family in case of the unfortunate death of the policyholder. Life insurance can enable the family of the policyholder to stay financially independent so that they do not have to compromise their lifestyle.
✅ Should you buy life insurance only for the tax** benefit option?
Section 80C** of the Income Tax Act, 1961 offers deductions up to ₹1.5 lakh paid towards your life insurance premiums. Thus, life insurance acts as a valuable tax-saving tool.
But you should not buy life insurance only for the tax** benefit. Your investments must match your long-term life goals, such as children's higher education and financial freedom in retirement. Also, you need to secure your loved ones with sufficient insurance cover to overcome the uncertainties of life.
ICICI Prudential Life offers a wide range of pure protection, savings, wealth creation, and retirement income plans. You should assess your financial needs and buy a policy best suited to your goals.
✅ Which type of life insurance should you buy based on life stages?
When you start earning: Buying life insurance early in life can help you get a substantial cover at comparatively lower premiums. You are also likely to have fewer financial obligations at this stage. Thus, you can choose to profit from investments in the capital market with unit-linked insurance plans (ULIPs). In addition to this, you can also consider protecting your income from unforeseen disabilities or critical ailments. A term insurance plan with a critical illness rider or a permanent disability rider can be ideal at this stage.
After marriage and children: With increasing liabilities, the need for a higher cover amount also increases. The ICICI Pru iProtect Smart Term Plan lets you enhance your life cover` at key events of your life* like marriage and the birth or adoption of up to two children. The enhanced cover safeguards your family's financial future in case of any unfortunate event.
Moreover, if you need to start planning for life goals, such as buying property or saving for your children's higher education, you can consider savings and investment-based life insurance plans like ULIPs or endowment plans to earn sufficient returns for your needs.
Approaching retirement: You can purchase a retirement plan to save and earn high returns to support your expenses in retirement. Retirement plans offer great features that can secure your loved ones and offer you a steady flow of income in your non-working years. You can also buy an annuity plan that can provide you with a guaranteed income to help you maintain your preferred lifestyle in your retirement years.
✅ Can you have life insurance for a specific tenure?
You can choose a specific tenure for your term life insurance plan and stay protected for a defined period, such as the repayment tenure of a loan or the years until your retirement. For instance, ICICI Pru iProtect Smart Term Plan offers coverage up to 99 years under the whole life insurance option.
✅ How much time does it take to get a life insurance death benefit claim?
We need relevant documents as evidence for the claim's validity. We might also carry out investigations in case of any discrepancies.
However, ICICI Prudential Life's Claim Settlement Ratio for FY2024 is 99.17%^ as per the annual report 2023-24. It reflects our commitment to honouring our liabilities to our policyholders and our claim handling efficiency.
✅ Why is life insurance important?
Life insurance is important because it provides financial security to the family in case of the unfortunate death of the policyholder. Life insurance can enable the family of the policyholder to stay financially independent so that they do not have to compromise their lifestyle.
✅ Should you buy life insurance only for the tax** benefit option?
Section 80C** of the Income Tax Act, 1961 offers deductions up to ₹1.5 lakh paid towards your life insurance premiums. Thus, life insurance acts as a valuable tax-saving tool.
But you should not buy life insurance only for the tax** benefit. Your investments must match your long-term life goals, such as children's higher education and financial freedom in retirement. Also, you need to secure your loved ones with sufficient insurance cover to overcome the uncertainties of life.
ICICI Prudential Life offers a wide range of pure protection, savings, wealth creation, and retirement income plans. You should assess your financial needs and buy a policy best suited to your goals.
✅ Which type of life insurance should you buy based on life stages?
When you start earning: Buying life insurance early in life can help you get a substantial cover at comparatively lower premiums. You are also likely to have fewer financial obligations at this stage. Thus, you can choose to profit from investments in the capital market with unit-linked insurance plans (ULIPs). In addition to this, you can also consider protecting your income from unforeseen disabilities or critical ailments. A term insurance plan with a critical illness rider or a permanent disability rider can be ideal at this stage.
After marriage and children: With increasing liabilities, the need for a higher cover amount also increases. The ICICI Pru iProtect Smart Term Plan lets you enhance your life cover` at key events of your life* like marriage and the birth or adoption of up to two children. The enhanced cover safeguards your family's financial future in case of any unfortunate event.
Moreover, if you need to start planning for life goals, such as buying property or saving for your children's higher education, you can consider savings and investment-based life insurance plans like ULIPs or endowment plans to earn sufficient returns for your needs.
Approaching retirement: You can purchase a retirement plan to save and earn high returns to support your expenses in retirement. Retirement plans offer great features that can secure your loved ones and offer you a steady flow of income in your non-working years. You can also buy an annuity plan that can provide you with a guaranteed income to help you maintain your preferred lifestyle in your retirement years.
✅ Can you have life insurance for a specific tenure?
You can choose a specific tenure for your term life insurance plan and stay protected for a defined period, such as the repayment tenure of a loan or the years until your retirement. For instance, ICICI Pru iProtect Smart Term Plan offers coverage up to 99 years under the whole life insurance option.
✅ How much time does it take to get a life insurance death benefit claim?
We need relevant documents as evidence for the claim's validity. We might also carry out investigations in case of any discrepancies.
However, ICICI Prudential Life's Claim Settlement Ratio for FY2024 is 99.17%^ as per the annual report 2023-24. It reflects our commitment to honouring our liabilities to our policyholders and our claim handling efficiency.
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