In life, you may have to deal with increasing inflation and rapidly-changing lifestyles, which may create unique financial challenges for you and your loved ones. Thankfully, having life insurance can provide the required assistance to bail you out in times of uncertainty. In other words, having life insurance allows you to keep your financial protection in sync with changing life stages. Throughout your life, your needs and requirements change, which may imply that the same amount of coverage is insufficient. Here, life insurance plans allow you to re-evaluate your coverage needs as you reach important milestones in life. Here is how your life insurance coverage may change throughout life –
1. Starting a Career & Dependent Parents
In case you are unmarried and have financially dependent parents, you may select a coverage amount that would take care of their needs in your absence. At the same time, the life insurance policy can help you lower your tax liability by offering tax deductions on the premium payable under Section 80C. Since you may have started your career by this time, saving on income tax can help pave the way for future savings.
2. Starting a Family
As soon as you get married, you may need to cover yourself and your spouse with adequate life insurance. Doing so will enable you to ensure that your spouse remains financially stable even if something happens to you. If you want, you may include your spouse in your life insurance cover under the MWPA (Married Women Protection Act), according to which policyholders can include their partners under the same policy protection.
3. Becoming a Parent
Once you become a parent, you must provision for enhanced life insurance coverage to include your newborn. You must take steps to protect the financial well-being of your child, its education and marriage with adequate life insurance coverage.
4. Buying a Home
When you decide to buy a home on a mortgage, your outstanding financial liability goes up due to the loan amount. Having life insurance here will help you make sure that even if something happens to you, the financial burden of repaying the loan amount doesn’t affect your family’s well-being. To make sure your loved ones can take care of any pending liabilities, you must take steps to increase the financial coverage under the life insurance plan to cover debts such as the outstanding loan amount, property maintenance charges and property taxes.
Post-retirement, your primary source of income, i.e. your salary ceases to exist. Without any form of savings or secondary source of income, you may have to depend upon your children for support. To avoid such an instance, it is crucial that you invest in a retirement plan, which is essentially a type of life insurance plan. You can maximize your savings throughout your working years so that you have enough savings to support your life after retirement.