Life insurance is commonly bought to protect the financial wellness of the loved ones of a policyholder, after the latter’s death. This is why people with dependent family members need life insurance. But what about people without any dependents? Do they also need life insurance? The surprising answer here is yes! People without dependents can also benefit from a life insurance plan. Let’s find out how.
Understanding life insurance
To start with here’s a basic idea about life insurance. Life insurance is an agreement between you and the insurance company. You buy a plan and choose a sum assured, which would be paid to your nominees after your demise. You also get to make investments through life insurance, as a part of the money you pay is invested in financial markets and fetch returns. You also get to buy riders that offer added protection. To ensure all these facilities are received, you need to pay a regular premium and keep the policy active.
Need of Life Insurance Without Dependents
Now, let us take a look at the reasons why you need a life insurance plan even when there are no dependent family members:
- Disability cover - Accidental death and disability is a component of life insurance. This cover is available in standalone plans, but more commonly, as riders along with the basic life insurance policies. If you have this cover, you get an added sum assured when you meet with an accident and become disabled. You may become temporarily or permanently disabled. You may have a partial disability or a permanent disability. Under such conditions, you may not be able to work and will lose your livelihood. The sum assured received can help you to clear your bills, pay rent, pay for employees to take care of your business, etc till the time you recover and can resume work. This is a very crucial way in which life insurance can help even when you do not have dependents.
- Critical illness cover - Another very helpful component of life insurance is a critical illness cover. Again, you can buy a standalone critical illness plan or get it as a life insurance rider. If you are diagnosed with a critical illness such as organ failure or cancer, the insurance provider will pay a lump sum amount of money to you. You are free to use that money in any way. You can use it to travel abroad and get treated. You can use it to hire people to look after you. You can use it to clear a loan and so on. This can prove to be very beneficial, especially when you do not have other family members to look after you.
- Retirement planning - The retirement insurance plans allow you to build up a corpus for your retirement years. Once you have enough money saved up for that period of time, you will never have to look at others for any kind of support. You can pay your own bills and live life on your own terms till the last day of your life. The retirement plans give you ample time and opportunity to build up a retirement fund over many years.
- Tax savings - A very good advantage of buying life insurance is that you get to save tax. You get a tax rebate of INR 1.5 lakhs a year when you pay your life insurance premium. This is available under Section 80C. Then, you get additional rebates for the various health insurance components like the critical illness cover. These rebates are available under Section 80D.
- Supporting your spouse - These days, it is very common to have a joint-income household. Your spouse may both be working and earning high incomes, with which you enjoy a lavish lifestyle. Your spouse is completely financially independent and does not depend on you monetarily. However, if you die, he or she may have to cut back on the lifestyle as enjoying the same lifestyle on a single income may not be possible. The house may have to be changed, some assets may have to be sold, etc. To ensure your spouse doesn't suffer in any such way, get a life insurance cover so that your family can continue to live the way they want even after your income stops. Get a good plan that would help replace your income after your demise.
These are some effective ways in which life insurance can help you even when you do not have any dependent family members.
As you can clearly see from the points mentioned above, even people without dependent family members can benefit quite a bit from buying a life insurance plan. There are many varieties of life plans, so you need to choose a plan carefully. Make a good selection and enjoy all the benefits mentioned above.
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