Have you ever tried to hold sand in your palm? The moment you close your fist, the grains of sand slip out of your hand in a matter of seconds, don\u2019t they? Savings are much like sand. The impact of inflation, the desire to upgrade your standard of living, and unanticipated situations that put a stress on your finances can swipe away your savings in a matter of days. That stands true even if you\u2019ve spent years diligently saving large amounts of your salary and have a solid investment portfolio. <\/p>\n\n\n\n
Life insurance plans are a strategic way to safeguard your wealth and your family\u2019s financial future. The benefits of life insurance plans are several and they come in handy even if you have savings in place. That\u2019s because they prevent your savings from completely eroding and leaving behind your family with financial obligations they cannot meet. Here are some features of life insurance<\/strong><\/a> plans that may show you why it\u2019s essential to have despite having savings. <\/p>\n\n\n\n In case of the demise of the policyholder during the term of the life insurance policy, their family receives the sum assured. This is known as the death benefit in life insurance plans. While dealing the emotional trauma of losing a loved one, nobody is in the space to figure out what amount of money is put aside in which avenues as savings. Chances are, you may not have all your savings in liquid assets. Figuring out these logistics while trying to come to terms with such a devastating loss is not ideal. <\/p>\n\n\n\n The benefits of life insurance<\/strong><\/a> aim to provide quick access to the sum assured to your family through a quick and seamless claim settlement process. This can help them take care of the immediate expenses to be met such as bills, school fees, etc. In the long term, it allows them to meet their financial goals. For instance, if your child wants to study in a foreign university after school, and you have saved for that, a life insurance policy ensures they can continue with their dream. This is because to meet the daily financial obligations, your family won\u2019t need to touch the education funds and can use the proceeds received from the policy. <\/p>\n\n\n\n It\u2019s natural to take out loans at certain stages of your life to help fund important milestones such as buying a home, starting your own business, and more. As long as you regularly pay your Equated Monthly Installments (EMIs), there shouldn\u2019t be an issue. But in case of a default, it can become problematic and give way to falling into the debt trap. <\/p>\n\n\n\n Your EMI includes a part of your principal and interest. When you fail to pay your EMIs, interest is charged not only on your principal amount but also the interest you owe. If this continues for a few months or years, it can result in a heavy debt burden due to interest on interest, increasing your overall liability. In case the worst happens and you\u2019re no longer around, or lose your income due to other unfortunate circumstances, this debt burden will fall on your family. One of the major benefits of life insurance is that it helps you manage your debt in such cases. <\/p>\n\n\n\n Depending on the type of life insurance plan you go for, you may get a survival or maturity benefit in addition to the death benefit. For instance, in an endowment plan, once the policy term is over and the policyholder has survived it, they receive a payout. You can use that amount for your financial goals at the time such as increasing your retirement corpus. <\/p>\n\n\n\n In addition to the maturity benefit, life insurance plans<\/strong><\/a> also come with crucial riders that you can opt for such as the critical illness rider, the accidental disability rider, and the family income benefit rider. Each of these life insurance riders are designed to provide additional financial support during specific situations. For instance, the critical illness rider makes a payout in case the policyholder is diagnosed with an illness like cancer. This is to help with the treatment costs as well as make up for the loss of income. <\/p>\n\n\n\n Who needs a life insurance plan?<\/strong><\/p>\n\n\n\n The answer to this question does not have anything to do with your level of savings. The question to ask yourself is, \u2018Who depends on me financially and to what extent?\u2019 You can have multiple dependents such as your spouse, children, parents, siblings, and more. Even if you have only one person who looks to you for financial support, that\u2019s a huge responsibility. Since they rely on you to financially provide for them, wholly or partially, it\u2019s essential to secure their future and your money with the host of helpful features of life insurance. <\/p>\n","protected":false},"excerpt":{"rendered":" Have you ever tried to hold sand in your palm? The moment you close your fist, the grains of sand slip out of your hand in a matter of seconds, don\u2019t they? Savings are much like sand. The impact of inflation, the desire to upgrade your standard of living, and unanticipated situations that put a … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":4949,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[250],"tags":[],"_links":{"self":[{"href":"https:\/\/www.clickfor.net\/wp-json\/wp\/v2\/posts\/4948"}],"collection":[{"href":"https:\/\/www.clickfor.net\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.clickfor.net\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.clickfor.net\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.clickfor.net\/wp-json\/wp\/v2\/comments?post=4948"}],"version-history":[{"count":0,"href":"https:\/\/www.clickfor.net\/wp-json\/wp\/v2\/posts\/4948\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.clickfor.net\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/www.clickfor.net\/wp-json\/wp\/v2\/media?parent=4948"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.clickfor.net\/wp-json\/wp\/v2\/categories?post=4948"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.clickfor.net\/wp-json\/wp\/v2\/tags?post=4948"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}