Being young is often closely associated with being carefree. However, there is a difference between being carefree and being careless. While it is important to look at life positively, you can quickly get lost in the difference between a positive attitude and naivety. Many young working professionals seem to be making steps that seem to be in the direction of being careless and naïve. The perfect example of this is the growing number of people that do not buy life insurance. However, the real reason for that can be the various doubts that people have about the product. These doubts oftenkeep them from securing themselves financially through life insurance. Hence, here are a few common doubts people can have about life insurance.
Life insurance is a product that financially secures your family in the case of your sudden death. It is essentially a contract between an insurance company and a policyholder. As per this contract, the policyholder pays a fixed amount of premium periodically. In exchange, the insurance provider promises to pay a fixed amount of money known as sum assured to the family in the case of the policyholder’s death. Some types of life insurance policy also offer a payout when the policy reaches maturity.
How is life insurance useful?
Life insurance benefits your family more than yourself. It essentially assures them they would have a financial safety net in your absence or inability. The product not only offers a payout in case of your death but it also covers your family financially in case you lose your ability to earn. This could happen if you become permanently disabled because of an accident or illness. Life insurance also helps you in creating a great deal of savings. This is through various discounts and tax benefits that life insurance can offer.
Is life insurance necessary?
Life insurance may not be mandatory, but it is definitely necessary. Most of all, it is one of the smartestpurchase decisions you will ever make. This is especially true if you have a spouse and children that are dependent on you. The primary benefit it offers is financial support to your family after your death or disability. However, there is much more that makes life insurance a must-buy policy. Amongst its numerous advantages, one is also a higher level of flexibility in making investment. For example, you can save a lot of money by adding a critical illness benefit to your life insurance policy. This saved money allows you to make productive financial decisions. If you are curious about the premium to be paid, you can use any life insurance premium calculator available online.
Why should I buy life insurance if I already have corporate insurance?
Corporate insurance is the coverage offered by a corporation to you. Many organizations in the country offer life and health coverage to their employees. This coverage is a part of the many benefits that come with employment. But many assume that if they have a corporate policy, they do not need to worry about anything. Hence, they choose to not buy life insurance on their own. While initially this may seem like a money-saving move, it actually ends up putting you in more danger.
Corporate insurance either only provides coverage worth your annual salary or 4 times that sum at the most. While the exact amount depends on the company you work for, that is often the highest amount of protection you will get. This amount is likely to fall short when needed. Moreover, the biggest downside of having corporate insurance is that it is only valid until you are that particular company’s employee. Hence, if you leave the job or are laid off, you will lose all the coverage that you had. Hence, it is extremely necessary to buy life insurance regardless of whether you have corporate insurance or not.