Life insurance is a necessary money tool that brings security, peace of mind, and financial aid to your family in case of your death. Here’s how life insurance explains why you should have it:
✅ 1. Your Family’s Financial Security
Key reason: Since you are the main breadwinner in your family, your untimely demise can render your dependents without money.
Covers everyday costs: Covers basics such as food, rent, utility bills, and school tuition fees.
Covers dependents: Provides for your spouse, kids, or ageing parents.
Income replacement: Prevents your family from incurring financial hardship due to your death.✔️ 2. Settlement of Debts and Obligations
Life insurance can provide financial assistance for your family to pay off your current debts:
Home loan/mortgageCar loan
Credit card debts
Personal loans or business loans
Without insurance, your loved ones might have to sell property or borrow money to pay for these debts.
✅ 3. Pays Funeral and Final Expenses
Funerals are expensive—sometimes thousands of dollars or more. Life insurance pays for:
Funeral and burial expenses
Hospital charges (if any)Legal and administrative costs
This protects your loved ones from shouldering the cost of your last liabilities.
✅ 4. Assists to Plan for Your Children’s Studies
You may purchase a term insurance policy having a savings plan (such as endowment or ULIP) to:
Secure money for your child's school, college, or education at a university
Not allow your child's education progress to be discontinued due to insufficient finances✅ 5. Long-Term Investment and Wealth Creation
Some life insurance plans are also a form of investment:
ULIPs (Unit Linked Insurance Plans): Insurance + returns in the market
Endowment Plans: Savings + lump sum after maturity is guaranteed
Money-Back Plans: Periodic payments in the term + last amount at maturity✅ 6. Retirement Planning
Some plans (such as pension or annuity schemes) give you a regular income during retirement.
Enables you to live on your own
Prevents reliance on children or others for finances✅ 7. Business Protection
If you are a businessman:
The business can be protected in the event of a key employee's death.
The remaining partners can buy out the share of the deceased partner through partnership insurance.✅ 8. Tax Benefits (Country Specific)
Life insurance usually has tax-saving advantages:
In India: Premiums are tax-deductible under Section 80C
Maturity amount is generally tax-free under Section 10(10D) (subject to conditions)(Always verify the current rules in your country.)
✅ 9. Peace of Mind
Life insurance provides you with the assurance that your loved ones will be economically secure even if you are no longer there. You can enjoy life knowing that you have made a responsible move for their future.
✅ 10. Less Expensive When You Purchase Early
The healthier and younger you are, the cheaper your premium.Waiting can make policies more expensive or even more difficult to obtain because of medical issues.
Summary: When You Absolutely Need Life Insurance
Situation Do You Need Life Insurance?
You have dependents (spouse, children, parents) ✅ Yes
You have debts ✅ Yes
You’re married or going to get married ✅ Yes
You have a business ✅ Yes
You’re the sole earning member ✅ Yes
You’re single with no dependents ❌ Optional