Life Insurance – Disadvantages of not having one.
Life Insurance, as the Indian population, is a kind of business contract that mainly benefits the insurers and the insurance agents, which affect the percentage of life insurance penetration in India, as compared to the other countries in the world.
According to statistics, in the year 2016, only 10% of Indians are under life insurance coverage. The percentage is striking because it reflects the lack of insurance literacy among the Indian Middle class.
Cannot decide whether to buy a life insurance or not, here is the FinVizer guide on insurance coverage:
1. Financial Crisis – Not you, but your loved ones.
The biggest consequence of not having a life insurance will not affect you, but your loved ones will. Nothing is permanent in life, especially in a country like India, where, as statistics show, road accidents alone claim around 400 lives every day. Beside road accidents, there can be so many fearful incidents like life-threatening diseases, natural and man-made calamities, plane crash etc.
2. Uncertain Debt
If you do not want your family to be repeatedly harassed by recovery agents, after your death, you must make necessary arrangements for that. Any outstanding loan can be taken care of if you happen to buy the right life insurance plan at the right time. Even if you never had an outstanding loan, your death may compel your family to have one.
If you have planned to quit your job and start out a business of your own, financial security the only thing that may draw you back. You may have arranged for the amount of capital needed for setting up your business, but without a financial back-up, it will be a terrible mistake to leave a stable job that you have.
4. Your Children Future may be at risk
your dream to send your child to one of the top education institutes in the country so that he/she can have a bright future ahead. The education sector in India, as we all know, has faced revolutionary changes in the past few years. In one hand, globalization has improved the quality of education in India, on the other hand, it has skyrocketed the cost of higher education. Even tuition fees in schools, these days, have become too expensive to bear, especially for middle-class parents. But, you know that you will do everything necessary, to ensure a bright future for your child.
5. Financially Dependent in Old Age
It will come a period when you will age and resign. Not every person gets ready for his or her future and as opposed to picking the best live coverage strategies; you favor having a bank account that you likely pull back once in a while to provide food for your lavish life. The outcome is disappointments of not contributing while you had the shot. In addition, monetary foundations are probably going to decrease your advance application, since you don’t have enough verification that you have a wellspring of income. While some people believe that retirement brings the golden years of one’s life, others consider it as the end of one’s financial independence. What is your take on retirement? If you go with the former type, it means that you have already started saving for your retirement. But, if you go with the latter, it is now time for some serious financial planning. If you do not want to feel like a burden on your grown-up children, you must start saving for retirement as early as possible. In case of your death, your surviving dependent(s) will receive the death benefit that will provide them with a financial security in your absence.
6. Won’t be able to Save Taxes
You work hard every day but when you receive your salary, a huge amount is already deducted. If you do not want to lose your hard-earned money, you must try to save income taxes as much as possible. One of the advantages of buying a life insurance is that it offers Income Tax benefits. As per section 80C of the Income Tax Act of 1961, the premiums paid by you are eligible for a maximum tax benefit of Rs. 1,50,000/-. Even the maturity benefit, which you will receive after the policy ends, is non-taxable under section 10 (10D)
7. High unexpected expenses
The entire motivation behind life coverage is to help you monetarily. Throughout everyday life, anything can transpire the moment you venture outside your front entryway without a notice. The greater part of us knows that costs constantly fly up when you don’t have additional cash. You can envision not notwithstanding having the capacity to pay your healing center bills! Save yourself the humiliation of borrowing cash whenever 8something turns out badly.
8. The absence of true serenity
Without life coverage, you generally stress and carry on with an existence with confinements notwithstanding for your wards. Extra security gives you one reason not to stress. Having wards makes you generally alarm and watched of the end result for them. Indeed, even after you pass on, it guarantees that your friends and family are well dealt with fiscally; they proceed with their instruction, keep up the present way of life and simply provide food for everyday costs.
9. Life Insurance Disadvantages for Loss of benefits
Lion’s share of you has obligations or credits that are secured by some of your advantages. That is beneficial for you, in the event that you are safeguarded. Something else, after your downfall, there is a high plausibility that the obligation authorities will visit you living arrangement soon. This implies all the speculation you had (resources) will be claimed by these organizations until the point that the exceptional adjusts are cleared.
Not every person trusts in live coverage since others think its fundamental point is to profit from you. Obviously, protection is a business, yet its business is dealing with you while you are here and your family after your demise. Subsequently, on the off chance that you are not yet guaranteed.
There are different type of life insurance plans available in India. Be it a term plan or a whole life plan; Unit Lined Plan or money back endowment Plan; child plan or pension plan- life insurance can be the solution to all your financial worries. Amongst the various available options, you must choose the appropriate plan according to your personal needs and preferences.