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Complete Guide To Financial Planning With Life Insurance

10 June 2022, 12:41 PM

When you buy a life insurance plan, you do a lot more than just cover your life. If you choose properly, you can plan your finances simultaneously too, while keeping your life covered. There are many ways in which a life plan helps you to do this. Take a look at this article to get all the details you need.

Top #6 Ways in which Life Insurance Can Help with Financial Planning

Here are the top ways in which you can buy a life insurance plan and secure the financial wellness your yourself and all your family members as well:

  1. Life cover - The biggest reason for buying a life insurance policy is quite obviously the life cover it offers. If you happen to die within the policy period, your loved ones will receive the sum assured. This will help them to take care of their financial requirements such as home rent, school fees, medical expenses, etc. This is the most important and significant way in which life insurance can help with financial planning.
  2. Saving for the future - Most forms of life insurance offer a combination of insurance and investment. You can invest a part of the money in a low-risk manner and allow your fund to grow. This happens while a life cover keeps you secured at all times. The life insurance investments allow you to plan for your future and meet all your financial milestones with ease and peace.
  3. Retirement planning - Another excellent way in which life insurance helps is by allowing you to build up a retirement corpus. You can buy an annuity life insurance plan and start putting money in it from an early age. This gives you ample time and opportunity for you to plan for your twilight years. You can buy a deferred annuity plan and start saving now. If you are closer to your retirement or have already retired, you can still use a retirement plan to smoothen the financial roadblocks that may come up. Buy an immediate annuity plan and start your retirement corpus right away.
  4. Covering your debts - You can also use a life insurance plan, namely a term insurance plan, to cover your debts. If you have some loans and mortgages that you are still clearing, but term insurance to ensure your family doesn't face a financially difficult time after your demise. If you die now, your family will be responsible for clearing the dues and they may not be financially capable of doing so. To ensure no such situation arises, buy term insurance with which they can pay off the debt after your demise and stay financially secure.
  5. Saving tax - If you are looking for some effective ways in which you can save tax, you should look to invest in a life insurance plan. Tax saving is an essential part of your financial roadmap so you should always look for ways in which you can save tax legitimately. The life insurance premium you pay is tax exempted up to a yearly maximum amount of INR 1.5 lakhs.
  6. Securing the wellness of your kids - And finally, if you have young children, you can secure their financial wellbeing with a child plan. This is a special life insurance plan that not only secures your life in your child’s interest, it also helps you to get money from time to time which helps you in your financial plan. Explore the child plans and find an easy way to plan for your child’s future.

These are some of the most effective ways in which a life insurance plan allows you to plan your finances. As you know, there are different types of life insurance plans that have very different objectives. You need to start out by understanding what your needs are and then choose the correct type of life insurance plan. Once that is done, invest your money wisely and get set to embark upon a very well-defined financial journey.

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