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Avoiding Life Insurance - One of the Biggest Mistakes
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In India, everyone is aware of the term ‘Life Insurance’, but how many of us actually own one? Although purchasing Life Insurance is considered to be one of the most important and financially sound decisions to make, the startling fact is that only about 10% of the Indian population is actually insured! Hopefully, you don't fall into this 10% category. But in case you do, it might be interesting and insightful for you to read about why a lot of people avoid buying Life Insurance, and why it is extremely crucial to buy a one.
Reasons why people avoid buying Life Insurance
1. Avoid thinking about the worst case scenario
People avoid Life Insurance by saying that they’re perfectly healthy and don’t require to buy one. But, the fact remains that people hate thinking about the worst case scenario including death, which is why they stay away from Life Insurance. What they don’t realize is that purchasing a Life Insurance isn’t about anticipating the worst or fretting pointlessly, it’s about securing your family’s future by keeping their interests at heart.
2. Don’t know where to begin
Some people are convinced about the importance of Life Insurance; they consider buying one; but end up doing nothing about it. They want to avoid the hassles of meeting up with an insurance agent, and going through the various options available before choosing one. These days, you can easily research about policies by checking out the different options on insurance company websites and comparing their rates.
3. Overwhelmed by the options available
The need and importance of Life Insurance have been the basis of several insurance companies setting base. The diverse options available coupled with the diverse communication around the same has made buying Life Insurance way more confusing and complicated than it needs to be. It’s always better that you speak to somebody who is reliable and knowledgeable in this regard, and who can help you understand the options at hand.
4. Medical Examination – A Big NO!
People try to evade medical check-ups as much as possible, since they consider it to be a big hassle. They also don’t wish to disclose their medical conditions thinking that it could work against them. What's more, some even think that they would have to pay for the tests! What many don’t realize is that it is essential to disclose the pre-existing medical conditions, as non-disclosure could backfire during claims stage. Undergoing a medical test doesn't usually cost you anything. It is the insurance company that takes care of scheduling an appointment and also pays for your medical check-ups.
Reasons why you should have Life Insurance
1. Life is Uncertain
When it comes to life, you can never say ‘that won’t happen to me’, especially since the life we lead today is extremely stressful, and the overall quality of life is deteriorating. Life Insurance is one of the best means by which you can protect your family and loved ones. In the unfortunate event of you no longer being there for your family, Life Insurance makes things a little easier for them by way of helping them manage the cost of living, education, etc.
2. To Pay Off Debts
Apart from the fact that Life Insurance would help a family cover their everyday expenses, it also covers any outstanding debts like mortgage, car loan, education loan, etc. Life Insurance is particularly taken as a security measure when people opt for huge loans like a big Home Loan. You wouldn’t want to put your parents, spouse, and children in a spot by leaving an extra financial burden on their shoulders, in addition to the emotional burden they would be left with.
3. Helps in Saving Tax
Yes, you heard it right! An insurance policy helps in saving taxes, no matter what insurance scheme you purchase. A premium you pay on an insurance policy is entitled to tax benefit under Section 80C, and for tax-free profits on death/maturity under Section 10 (D) of the Income Tax Act, 1961.
When it comes to Life Insurance, it is for sure better late than never. Make sure to buy an insurance policy for your family and protect them and their future.
If you liked what you read, check out other articles in the series like decoding the complex language of investment
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