Things to Know, before and why to buy life insurance!
• Most people don’t consider life insurance until later, but the best time to buy it is early on — even in your 20s.
• If you financially support a partner, children, or ageing parents, you need life insurance.
Anyone working a high-risk job or with extreme hobbies is likely to pay more for coverage, but those risks alone are reason enough to get life insurance
Reasons You Need to Buy Life Insurance
If you work for yourself, are starting a family, or are paying off debt, it’s probably smart to consider a life insurance policy. Having life insurance has become more of a compulsion these days. Read the blog to know the top 10 reasons for buying a life insurance plan for yourself and your family.
Buying a life insurance policy early in your life is one of the smartest financial decisions you can make in your life. Given the kind of hectic and at times chaotic lifestyle we have in today’s world, it is important to plan and save to secure the financial future of your family. One mechanism that can help you do so within your means cost is a life insurance plan.
Life Insurance can be defined as a contract or an agreement between a policyholder and an insurer, where the insurer promises to pay the recipient a sum of money in exchange for a premium that is paid over the time, upon the death or maturity of an insured person. Simply put, life insurance financially aids the family of the policyholder in case of his/her unfortunate event of death. Given that death is unavoidable, here are the top 10 reasons why one must absolutely have a life insurance plan
Taking care of a loved one
Looking after your loved ones in your absence with a life insurance plan, you can ensure that your family and dependents are taken care of, even when you’re not around them to do so. If you are the sole bread earner of the household, their monetary security should be of paramount importance to you and hence, getting a life insurance plan is a wise idea.
Paying off debt
The deb is your financial obligation should not become your family’s obligation after your death. It is significant to ensure that your debts are taken care of while you are on your good healthy days. However, in your absence, the life insurance policy will come to the rescue as your family can use pay off obligations such as auto loan, home loan etc. with the amount received from the insurer.
Achieving Long-term Goals
As a life insurance plan keeps you invested for a long time, it can be an instrumental tool to help achieve long term life goals like buying a house or funding major events of your child’s life. There are certain investment options available in the market that provides life insurance along with contributing a certain amount in secure investment options.
Supplementing your Retirement Goals
In the golden years of your life, your regular source of income might diminish. With a life insurance plan, you can surely ensure that you have a source of monthly income. Investing in a pension plan can be considered as you have to pay a stipulated amount regularly and get a steady monthly amount, even after retirement.
Cheaper Premiums when you’re younger
When you are younger and fairly healthy, you can procure a life insurance policy at a comparatively lower rate. This ensures that you get the premium amount and stay protected for a longer time, without worrying about the increase in premium sums.
Under the tax ordinance in Pakistan, you can avail of a tax rebate, when you buy insurance from the premiums paid of a life insurance policy. Therefore, not only does life insurance protect your life, but it also helps you save your money on tax.
Proposes Regular Savings
Life insurance is an important financial instrument, but one needs to remember that it is a long term tool and hence, require regular savings/payments. Therefore, it indoctrinates a habit of orderly savings to pay premiums, so that you save up enough money to financially secure your life and also the life of your loved ones, in case something unfortunate were to happen to you.
You Might not Qualify later
“Life is unpredictable” we have not only heard this but the current pandemic has made us realize this quite vividly. So as a healthy and financially independent individual, you would be qualified and eligible to buy a life insurance plan. Though, life insurance runs on certain reservations and segregations. For instance, if you fall critically ill and are unable to work because of the same illness, you might not be eligible to buy the desired insurance plan from the chosen insurance provider. Hence, it is important to buy life insurance when you healthy both physically and financially. It also is imperative to look for certain additional benefits that improve the quality and coverage of your plain life insurance plan.
Peace of Mind
Having a life insurance plan brings a certain degree of peace of mind with it as it assures that your life is financially secured. Also, in case of your unfortunate death, the death benefit would be paid to the dependents of the policyholder and their future financial needs would be taken care of.
Support ageing parents financially
The general rule of thumb is that if someone else relies on your income to live and sustain, then you probably or most definitely need life insurance.
Most people think and feel responsible to protect their spouse or children, but according to a research report, about 6.2 million millennial and others are performing duties of caregivers for parents, parents-in-law, or their grandparents.
If you support your elderly parents, or you think that you would be in that role one day, a life insurance policy ensures they’re left with some money for long-term care or personal expenses if you can no longer provide for them.
You work for yourself
If in your life there is a phenomenon of “every man for himself” meaning that life insurance can be incredibly valuable and helpful if you’re a small business owner, A report from Business Insider says that in many cases in the western world if you set up a “Key Person” or “Buy/Sell Agreement” life insurance policy, your employees or key stakeholders will still get paid in your absence. Basically, the death benefit on your policy will go toward paying off the entirety of the loan in the event of your death, and then the remaining amount will be paid to your beneficiaries.
Your job is high-risk
When buying life insurance the amount of risk associated with your profession shall always be assessed. Simply put, if you work in a perilous or high-risk environment, and there is a greater chance of dying than someone who sits at a desk all day and performs the job.
Some Jobs that are considered high risk are considered to be in aviation, construction, firefighting, mining, oil and natural gas, and a few others will almost always affect the premium, making it higher according to experts. Still, the high risk alone makes the policy worth having.
Most life insurance policies will not provide people in high-risk industries to add a disability rider, so it is recommended by Smartchoice to buy separate short-term insurance plans as well to protect yourself against temporary loss of income if you get injured on the job or elsewhere to provide medical and financial assistance.
You have extreme hobbies
If you’re a thrill-seeker and adventurous with a liking for extreme sports, you’ll probably be considered higher-risk by a life insurance company. But same as to have a high-risk job you’ll pay more to be insured, but the cost is worth it considering the likelihood you’ll die from unnatural causes. If you do have an extreme hobby, for instance, a thing like rock climbing, scuba diving, or something equally thrilling it’s best not to lie at the time of buying the policy, we at smartchoice advice that if you die within the first two years your policy is active and you didn’t unveil your regular high-risk activity, the insurance company has the right to cut the death benefit, or cancel the policy altogether.
As for the cost, you’ll typically see either a higher base premium or an extra annual fee calculated as a percentage of your coverage amount. Every insurance provider assesses the risk of hobbies differently, so it’s good to compare and shop if this applies to you.
Life insurance buys time and options
Too often, when an income earner dies, survivors are forced to make tough, dramatic decisions and to do so quickly. They have to make the decisions at a time when they may not be emotionally in a position to make good choices. Life insurance gives survivors a chance to adjust over time rather than having to move to a downsized home or find a new job right away.
Your life insurance gives your family choices by providing the benefits to help pay off debts, to help meet housing payments and ongoing living expenses, to help fund college educations for your children or grandchildren, and much, much more.
Life insurance provides cash when it’s needed most
Your life insurance policy will deliver a specified sum of money at a particular time of need. Upon your death, your family can be guaranteed that the amount you’ve chosen perhaps hundreds of thousands of rupees, maybe even millions will be there almost immediately. And that death benefit which is provided by the insurance provider is generally not subject to income taxes by the government. If you are not completely certain that the plan you are opting for provides you with the desired coverage which is in line with your family’s needs, you can visit www. smartchoice.pk, the platform has multiple life insurance plans from top providers which would help you in making a smart decision by searching, comparing and selecting the one that fits your and your family needs and requirements. When you speak to a customer adviser at smartchoice via UAN 021-111-212-212, you’ll work together to determine how much coverage you need, review what multiple products and policies are right for you, and review cost comparisons.