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Do I Need a Life Insurance Policy If I Have No Dependents?

dateKnowledge Centre Team dateDecember 01, 2021 views310 Views
Life Insurance Coverage for Dependents | Buy the Best Life Insurance

You are currently single and happy with your job and have no plans to get married or have a child. At this point, you might think what will be the use of buying life insurance as no one is dependent on you. You may think it will have no benefit. This is what the major part of the population feels. But on the contrary, having a life insurance policy will benefit you even if you have no one dependent on you.

Though the major benefit of a life insurance plan is providing financial protection to the dependents, it is not the only one. Life insurance can also act as a great long-term investment option. Plans such as ULIPs offer you the opportunity to invest and grow your wealth.

Here are some other reasons why you should consider buying life insurance even if you have no dependents

1. Protection from Critical Illness Expenses

If you suffer from a critical illness then this can cause you a huge financial strain. Critical diseases like cancer, heart ailments, etc require extensive care. Treating them takes a long time, even whole life, and huge costs.

These diseases require you to stay away from work and in hospital for the major part of your time. This can cost you lakhs of rupees. Medications required to treat these illnesses are also very expensive. This can leave a hole in your pocket.

How will you be able to manage such a huge cost if you, unfortunately, suffer from such an illness?

Life insurance policies provide you with an option to add riders such as critical illness will help you protect you from the burden of huge critical illness or disability expenses.

2. Tax Saving Ability Of Life Insurance

Life insurance plans can also save you taxes as well. Premiums you pay for your life insurance policy attract tax benefits. Tax deduction up to Rs 1.5 lakh is available to you on premiums paid under section 80C of the Income Tax Act 1961.

Not only premiums, the maturity benefit that you will receive is also tax-deductible under section 10(10)D of the Income Tax Act. Thus, life insurances make up a good investment for you if you are looking to save some taxes. Not only tax savings, but life insurance also builds a habit of general saving in you which can surely help you in a tough day.

3. Long-Term Investment

A life insurance policy is not for quick gains, it is an investment that sustains in the long run. They have a sum assured that you will receive in the future. This also keeps your money safe. So even if you don’t see yourself marrying and starting a family now, does not mean that you won’t in the future as well.

Buying a life insurance policy at a low rate at a young age will ensure that you don’t have the burden of planning your way later on once you do have a family. Many life insurance policies give you an option to increase your sum assured as you achieve new milestones later on. Though this will increase the premium as well.

4. Long-Term Asset

Certain life insurance types, such as the whole life insurance, involve maturity benefits and give you an option to withdraw during the course of your policy as well. Thus, it gives you benefits even when you are alive.

5. Insurance Gives you Chance to Build your Wealth

Life insurance variants such as ULIP (Unit-linked Insurance Plan) combines the dual benefit of both insurance and investment in a single plan. Under this plan, the premium you pay is invested in securities that are linked to the market.

Returns from these securities can help increase your investment’s value. You can choose to invest in a fund that you prefer according to your risk capability. If you don’t want to take risks you can either go for safer funds (debt) or opt for Endowment plans.

Endowment policy combines insurance and savings. These plans involve life cover as well as a savings component that is risk-free and keeps your wealth preserved. Also, you get a sum assured after maturity as well.

6. Premiums are Lower

When you decide to buy a life insurance policy when you are young, the premiums to be paid by you will be cheaper than usual. Buying yourself life insurance before you are married and have children makes the premium affordable as well. This is because there are no major expenses on you and your income is all for yourself. So, buying at a younger age will prove to be a beneficial decision for you.

Life Insurance Premiums | How your Age Impacts the Life Insurance Premium

7. Legacy

If you want to leave behind your legacy, life insurance will help you do so. Whole life insurance plans prove a great investment if you want to create a legacy. Whole life plans cover you till the age of 99. If you die before this age then the sum assured is provided to your assigned beneficiaries.

Even if you have no dependents, you can choose your parents or even an organization that you like to give the amount to as your beneficiary. This allows your legacy to live even after you are not present.

8. Retirement Safety

What if you plan to retire and travel the world? Or pursue some other activity, if you have not planned your money, you will have trouble doing these activities. After retirement, your regular income stops and you need to manage your expenses well. But if you buy a pension plan, you could live safely and happily after retirement as well.

Retirement and Pension plans require you to accumulate your savings in a fund over some time. This accumulation results in a huge corpus. A regular income stream is created through this corpus that comes to help after you retire.

With these points, one thing is clear, life insurance is a must whether someone is dependent on you or not. This is because life insurance policies help you at almost every stage of the life cycle. It takes care of you when you have just started working, it increases your sum assured when you get married and start a family, and its benefits stay with you even after retirement.

There are various types of life insurance policies such as ULIPs, term insurance, endowment policy, etc. You can choose the one which best suits your need and make your future safe.

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