Why Life Insurance?

You think twice before taking the plunge into buying insurance. Is buying insurance a necessity now? Spending an 'extra' amount as premium at regular intervals where you do not see immediate benefits does not seem a necessity at the moment. May be later.

Well you could be wrong. Buying Insurance cannot be compared with any other form of investment. Insurance gives you a life long benefit and the returns will definitely come but only when you need it the most i.e at the right time. Besides buying insurance early in life is one of the wise decisions you could take. Because the premium you would be paying would be comparatively lower.

Insurance is not about how much more it can offer you when the stock market is at its peak. It may not be an attractive investment option. But weigh the pros and cons and consider how much more it offers at a small price.

Most important of all it provides you with that unique sense of security that no other form of investment provides. It gives you a sense of financial support especially during that time of crisis irrespective of the fluctuations in the stock market. Insurance provides for your career goals right from your childhood years.

If the earning member of the family is no more your child's educational needs will not suffer. In fact his higher education too will be provided for. You need not spend sleepless nights thinking about how to save for your child's marriage. Life Insurance will take care of that typical once-in-a-life-time spending on marriages.

An accident or a disability may be devastating but an insurance policy can be of utmost support for the family during such times too. Besides it provides for additional benefits such as bonuses. You need not worry about your retirement years. The rising prices, taxes, and your lifestyle will be taken care of easily. And you can relax and spend your old age in comfort and peace.

Life insurance today plays a major role in ones life at various stages. Considering the benefits it offers one cannot but give a thought to buying an insurance policy at the earliest.

Need for Life Insurance

The need for life insurance comes from the need to safeguard our family. If you care for your family's needs you will definitely consider insurance.

Today insurance has become even more important due to the disintegration of the prevalent joint family system, a system in which a number of generations co-existed in harmony, a system in which a sense of financial security was always there as there were more earning members.

Times have changed and the nuclear family has emerged. Apart from other pitfalls of a nuclear family, a high sense of insecurity is observed in it today besides, the family has shrunk. Needs are increasing with time and fulfillment of these needs is a big question mark.
How will you be able to satisfy all those needs? Better lifestyle, good education, your long desired house. But again - you just cannot fritter away all your earnings. You need to save a part of it for the future too - a wise decision.

This is where insurance helps you.

Factors such as fewer number of earning members, stress, pollution, increased competition, higher ambitions etc are some of the reasons why insurance has gained importance and where insurance plays a successful role.

Insurance provides a sense of security to the income earner as also to the family. Buying insurance frees the individual from unnecessary financial burden that can otherwise make him spend sleepless nights. The individual has a sense of consolation that he has something to fall back on.

From the very beginning of your life, to your retirement age insurance can take care of all your needs. Your child needs good education to mould him into a good citizen. After his schooling he need to go for higher studies, to gain a professional edge over the others - a necessity in this age where cut-throat competition is the rule. His career needs have to be fulfilled.

Insurance is a must also because of the uncertain future adversities of life. Accidents, illnesses, disability etc are facts of life which can be extremely devastating. Other than the hospitalisation, medication bills these may run up it's the aftermath of the incident, the physical well being of the individual that has to be taken into consideration. Will the individual be in a position to earn as before? A pertinent question. But what if he is not? Disability can be taken care of by insurance. Your family will not have to go through the grind due to your present inability.

Moreover, retirement, an age when every individual has almost fulfilled his responsibilities and looks forward to relaxing can be painful if not planned properly. Have you considered the increasing inflation and taxes? Will your investment offer you attractive returns under such circumstances? Will it take care of your family after you? An insurance policy will definitely take care of these and a lot more.

Insurance today has opened up new vistas for every section of society. Even for the village farmer insurance holds a lot of potential. Considering how dependent our agricultural system is on the monsoon, the farmer sees a dim future. The uncertainty of the monsoon too can be taken care of by insurance. Looking at the advantages of an insurance policy a number of farmers have gone in for insurance. Insurance has become a necessity today. It provides timely financial as also rewards with bonuses.

When is the right time to buy life insurance?

Buying Life Insurance cannot ever be compared with other investment decisions since it is very much in contrast with those stock market investments where you wait for the right time to buy and sell. Neither is this like receiving tips on a particular scrip doing well in the market and holding great future prospects.

Buy life insurance at the earliest. Do you know when you would fall ill? Are you sure about your future income earning potential? Are you sure you will never meet with an accident? If not buy insurance now.

This is because the future is always uncertain. Just as buying insurance is a necessity so also buying insurance early in life is important too. With proper financial planning one can work out as to how much money an individual is entitled to after the end of a particular term. A policy that will fulfill your child's future educational needs would have to be timed appropriately so that he receives the policy amount at that time when he needs it the most.

By taking a policy early in life you not only benefit in forking out a lower premium amount but also make a wise decision as far as insuring risks to yourself and your family is concerned.

Are You planning your retirement?

As old age approaches, security and comfort become the most sought after. Advances in science and technology have thankfully lead to an increase in life span but at the same time there exists a requirement of funds for the individual during his retirement period to carry off a certain standard of living and fulfill the day-to-day essentials of life.

Proper financial planning during an individuals' productive years can put to rest these issues but sadly, such savings habits in every individual is hard to come by. By foreseeing the growing needs of the future and saving an appropriate amount well in advance can help the individual tide over the financial problems that may arise in his old age.

Retirement planning has not been taken seriously in our country. One of the reasons for the pension market not being very attractive may be the not -so -attractive financial options that were available earlier.

Professionalism:

Today, things have changed for the better. More professionalism is expected to come in with the entry of foreign companies in insurance.

Multiple options:

These insurance companies will also bring in a variety of financial products to choose from. Besides the insurance plans will be designed in a manner to suit every individual, be it the urban or the rural customer.

Flexibility in Plans:

The individual need not compromise anymore by merely accepting whatever was handed over to him whether it suited his needs or no. The customer is king today and can purchase just the right product according to his financial needs. In this changed environment, he can have tailor made products too. Insurance companies may come out with policies combining healthcare and pension as also taking into consideration the rising inflation. Such combinations will find a number of beneficiaries.

Improved Service:

An important area that will go through a total revamp is service. The insurance agents will have to brush up their skills in order to gear up for the competitive market. And you as a customer can expect prompt service unlike yesteryears.

Multiple information channels:

Informed decision-making is another of those upcoming areas. The customer can take an informed decision today. Insurance agents will not be the only source of information. With dime a dozen channels of information mushrooming each day the customer is bombarded with information explosion. The internet contains a wealth of information and each and every customer can now look forward to receiving every minute detail of the product he plans to purchase at his finger tips.

Buying an insurance policy is a long-term investment and it would only do well if you consider all those benefits you will receive in comparison with your financial outflow. With an increased number of financial options available and an equal number of sources for information a proper analysis could help you gain much more than you actually expected.

What does Life Insurance provide?
The proceeds accruing from Life Insurance policy can be utilised for

Final expenses resulting from death

After an individual's untimely death, his survivors and heirs are entrusted with the responsibility of conducting his last rites according to customs and traditions as propagated by religion. Almost all religious sects follow certain rules that need to bidden regardless of the social circumstances.

As it is, the deceased individual's family members are likely to be emotionally devastated by their loss. And if they are saddled with monetary expenditure resulting from the death of their family member, their condition might become dangerously unstable.

Thankfully, the proceeds from the deceased's insurance policy will more than provide for the final expenses and rituals associated with the funeral. At least this way, the deceased's family is absolved from the shame and sacrifice that might be expected of them after their family member's death.

Guaranteed maintenance of lifestyle

As long as there is a steady and assured supply of income, an individual's family and dependants are able to keep a self-professed standard of living. The family's eating and drinking habits, entertainment and lifestyle expenses are maintained at a certain level during their earning member's lifespan.

In case of the unexpected death of the earning member, his or her family will be hard-pressed in trying to arrange for funds that would assist them in maintaining the standard of living that they've grown accustomed to. After all, no one really likes to make sacrifices, despite their miniscule fiscal value.

And this is exactly where the proceeds from insurance will prove extremely useful for the family members. They will be able to maintain their standard of living without making any sacrifices whatsoever.

Replacement of income

Most families in India depend on the earnings of the breadwinner to sustain their existence. Routine day-to-day expenses like provisions and ration supplies, milk, newspapers, medical bills and general maintenance are normally met through a regular supply of income.

Additionally the income also provides for any outstanding payments arising from rent, loans or mortgages. These liabilities have to be minimised by making payments at regular intervals. In case there is a default in payments, there are chances of legal intervention and repossession of the utility made available.

And having to do without a service that the family has grown accustomed to can prove to be severely detrimental to their metaphysical and social well being. The proceeds from insurance if invested wisely can support the insured's family members and dependants for the remainder of their lives with relative ease and in creature comfort.

Costs of education

Education used to be considered as a sacrosanct field until a decade back. With the advent of privatisation into mainstream education, the cost of higher studies has escalated beyond all reasonable limits. And to add fuel to this fire is an annual inflation rate of 6.32 percent.

Most families start planning for their child's future education costs as soon as he clears his kindergarten papers. After all, every parent wants his or her child to grow and become a professionally qualified engineer or physician or likewise. And this is a fairly mean task since year after year since capitation fees charged by even run-of-the-mill colleges come up to lakhs of rupees.

In case either of the child's guardians or parents happens to expire before the end of his education, there are chances that he will not be able to complete his education. Nothing aids an individual in his life as much as what he or she knows. In any case, every parent wants to plan for his children's future and security.

And to achieve success in this plan, it is vital that the guardian or parents uses insurance as a tool to plan for his children's future, regardless of his or her presence. In case of the demise of a parent, the proceeds from his or her insurance can be channeled into their dependant children's education fund.

Estate and other taxes

Normally after a family member's death, his family or dependants are usually flooded with notices from creditors or taxation officers. At a time like this when the family is struggling to recover from such a severe shock, it might seem inhuman for them to be subjected to such humiliation.

However in today's materialistic world, chivalry is no longer in demand. In case of an emergency, women and children rarely come first but creditors always do. Not only is it prudent for any individual to clear his debts prior to his demise but it would also spare his or her family the shame of having to clear debts that they did not incur, at least directly.

Since no one knows when his or her time may come, there is always a chance that the dependants will have to pay the existing dues regardless of their economic status. Thanks to insurance, all existing debts and taxes can be cleared from the proceeds in no time at all. And the dependent family will be spared from the ignominy of having to pay what they did not owe, in the first place.

Continuity & Security of interests

At times after an individual's death, his family might have to sacrifice their interests in business or investments to arrange for their expenses and maintain a decent standard of living. In extreme cases, the dependent spouse might also have to suffer and sacrifice everything the family owns in a desperate bid to maintain the family name and crest above everything else.

After all, India is still a country where honour is regarded higher than life itself. Surely, making prudent investments in insurance from time to time can aid in averting such a disgraceful situation for any self-respecting individual's family. Only then will the family be able to maintain its standard of living prior to the demise of the head of the family.

Obviously, the proceeds from insurance will help secure the family's status and position in society as well as maintain their socio-economic level in life. Thus insurance serves the perfect hedging tool for securing the interests of the family and maintaining the continuity of their interests.

What does life insurance have to offer?

Life insurance is many different things to many different people. For some, it is a premium to be paid on time. For others it offers liquidity since cash can be borrowed when needed. For the investment-minded, it denotes a constantly growing capital account and numerous other benefits.

Life insurance is nothing but the creation of capital funds on an installment basis. Only here, the results are guaranteed. Life insurance is basically a property that is bought under a contract, accompanied by contractual guarantees that ensure large sums of money at the death of the insured.

The contractual guarantee is the promise to pay, backed by one of the oldest and most stably regulated financial industry operating in the Indian sub-continent today.

Insurance Buys Time and Money

People like to refer to life insurance as time insurance, the reason being that life insurance proceeds are paid to the insured's beneficiaries in case of death. The money proffered by life insurance helps buy time to adjust to the change of circumstances. Insurance provides large amounts of cash that will keep the lifestyle for the survivors the way it was before the insured's death.

Insurance Offers Peace of Mind

For the person who buys an insurance policy, it offers absolute and complete peace of mind. He or she knows that the decision made by him will provide sound benefits in the future, whether or not the individual may live to see it. The life insurance policy will subsequently prove this in the future if and when funds are needed. This is the guarantee of the insurance contract.

Multiple Applications

The future is uncertain for each and every one. No one knows how long he or she will live. The investment benefit is paid to the insured's beneficiaries after his death or it can be used during the life as well. Life insurance policy owners can turn to the cash value of the policy in case of a financial emergency when all avenues are either blocked or denied. They know that they can avail of loans based on their insurance policies.

Insurance policy owners can use the cash value of their policies to meet their long-term financial needs as well. They may have purposefully invested in insurance to use the cash in the policy for their children's future marriage expenses or higher education fees.
Enduring Elasticity

Since life insurance is flexible enough to serve several needs, the insured can keep several long-term goals in mind once he or she invests in the insurance plan. The cash value of the policy can be allocated towards augmenting the monthly income during the retirement years. Leisure years should be turned into pleasure years. Permanent life insurance is designed on the concepts of long-term flexibility.

Financial Security

The insurance policy offers contractual guarantees to people looking for peace of mind when they buy life insurance. Life insurance offers complete financial security. The purchase of life insurance demonstrates concern for a family's future financial well being.

Regard for Family

The purchase of life insurance clearly displays care and concern for the people the policy
owner loves.

Insurance is Safer

No financial institution can do what life insurance does. No industry can back its products with reserves and surplus as sound as those of the insurance industry.

The proof of strength and safety that insurance companies have ensured even under the most adverse of conditions is a matter of pride for the entire insurance industry. For generation after generation, life insurance has been acclaimed as the very benchmark of security against which the other industries are measured.

Why is Life Insurance necessary?

A well-planned life insurance fund can clear the pending debts of the insured after his or her imminent demise. At times, this can mean the difference between retaining the family house & heirlooms and losing it by default to the creditors.

It can also avoid the possibility of a distress sale whereby an item might have to be sold at a much lower price owing to the urgency of funds.

Insurance can also pay for the cost of higher specialised education. Education in certain specialised fields can cost a staggering amount and owing to the intense competition in the job market today, not many people have the liberty of choice.

The need of education is clear. Parents who want to provide for their ward's education must carefully save money to provide for their future. Scholarships are not easily available either. Life insurance can easily provide for expected educational costs even if the insured dies before his children's education is complete.

At times, after the death of the sole-earning member of a household, the surviving spouse may need a secondary qualification current to the prevailing employment market situation. This additional education is critical since only one parent has to bear the responsibility of the entire family. A life insurance policy can provide the funds required to stabilise the family situation until the pending tension has eased off.

Do you need life insurance?

Every person has an economic value in life, which is connected to the income potential of the individual. So every income provider or producer has to be properly insured against any shortfall that might result from his or her death when some one else will be dependent on that person's income for financial security.

Without proper planning, a sudden financial emergency can force a family to act in a manner that would be inconceivable or unthinkable for most parents. They might have to halt children's education and/or have to sell the house and/ or the car and/ or fall deep into debt.

Life insurance does not replace the intrinsic value of a person's metaphysical self. Nothing and no one can. What it does attempt to provide is solid and tangible security to weather the storm that might befall the individual's family and dependents after his demise.

Young Family Needs

So what does Life Insurance offer young families?

Protection

Families with young, dependent children need adequate protection against losing their primary wage earner's income if and when premature and unexpected death occurs.

Emergency Fund

Life insurance provides an additional consideration by providing an emergency fund to provide money for survivors. It buys the time so essential and necessary that is needed to adjust to the death of a parent or spouse.

The insurance proceeds provide a temporary buffer that gives the survivor the time and the inclination to adjust to the new and unprecedented situation. The surviving beneficiary has the option to consider career alternatives as well as make rationally based and thoroughly informed decisions.

Education

Yet another priority need for young families is building adequate funds for higher education costs. The need for highly specialised education is greater than ever before. Qualified students obviously enjoy better lifestyles and have more rewarding careers compared to other people.
Every year, the cost of education rises beyond estimated limits. Capitation fees and deposits only aggravate this situation further. Every young family must start a substantial savings plan. The sooner, the better since compounded interest schemes need time to work and show their appreciative worth. Life insurance also offers handsome reductions in taxes.

Retirement

Young families should also plan for retirement in the long run. Investment and pension plans are not adequate to fund the retirement needs at times. Once a family attains a specific standard of living, it is very hard to adjust to a reduced standard during the retirement years.
Systematic savings over a working lifetime is the key towards supplementing other retirement programmes. The old rule of saving 10 percent of the annual income still holds true for single income young families. Young families with modest incomes must commence with at least a 10 percent guideline if they cannot make a total commitment immediately.

Disability

A single income young family would be in an extremely perilous situation if there would be a loss of income owing to a disability. In case an income provider is unable to work, the economic consequences could be severe for the family. Not only does the family have to maintain the established standard of living, it also has to shoulder the additional burden of a disabled member within itself. Disability is the major need that is to be addressed and protection against this loss is a priority.

Besides in most of the families today, two incomes are an absolute necessity. For these households, the protection of both the income producers is extremely essential.

Single Yong Adults

People who belong to the young, single adult age group are young, healthy and energetic. Since they are single, they enjoy more freedom and have fast access to money. Most of them bear carefree attitudes that have been passed on to them from their families. As they begin to assume new responsibilities and gain maturity, it can be a major transition in their lifestyles.

The ironic part about single, young individuals is that they might possess extensive funds but none of them have established any specific savings plans or cash reserves in case of any emergency. Single, young people need to protect their newly acquired status and their earning capacity besides their human life-value the most. Their priorities' list must be topped by disability income insurance so they are protected against loss of income and loss of insurability in the future.

People from this socio-economic group also have loans to pay off and high credit card balances. They will also need financial help so that their debts are paid off until they learn to provide steady finance for themselves.

Rising Debts

Most single, young adults are possessed by a dominant need to pay off their debts and fulfill their retirement obligations at the same time. They also need help in planning their budget for the future.

Most single, young adults lack an understanding of the virtues of saving. The value of future planning and adhering to the plans made is yet to be impressed upon their minds. They don't realise the significance of compound interest and tax implications on savings and investment choices. Professional insurance agents can provide a lot of help to them in this regard, to say the least.

One of the most important needs, voiced together by a majority of people in the single young adult arena is to make the right choices that are consistent with proper planning to take care of their needs. Single people are used to putting off decisions regarding their current status. It is consequently difficult to convince them that they should not put off the events that need to be done immediately.

For single, young adults there is an ever-increasing need for life insurance. Yet, the need to save money is equally important since most people don't start any serious savings until they find a suitable means of employment. For them, protection against loss of income owing to a disability must be addressed the moment the person begins earning an income.

Advantages of starting an early financial security program

Dual Income Young Families
Why is it necessary to invest in insurance?

Families having twin incomes generally have more money to spend as well as money to save. Yet as everyone knows making money is easier compared to saving money. Similarly two incomes are spent just as easily and as quickly as one.

If the mother decides to stay home after children are conceived can greatly affect the standards of living for the family. Such couples have highly variable and completely diverse needs compared to their single income counterparts.

In dual income families, there is obviously a marked sharing of household duties. Since both partners have to balance the needs of work and home, sharing becomes essential. Despite this liberal attitude, dual income families show the least tendency towards savings despite having two incomes.

Dual-income families buy less permanent life insurance since they view the second income as 'insurance' against loss of the first. They prefer to live in a surrealistic world of complacency and procrastination.

Financially, the dual income family is part of a fairly complex situation. Both the partners pool their resources together. This enhances their standard of living and helps them in achieving financial independence. On the other hand, the increased level of expenditure and desire for a better lifestyle invites increased taxes, creating a challenging situation.

How are the needs of Dual Income families similar to Single Income families?

Families with both partners working have needs and wants more or less identical to their single income-earning counterparts. Both family types are equally vulnerable to the same risks.

After all, everyone needs protection against dying early or living too long or being disabled. Unexpected emergencies and contingencies need to be covered through adequate funds too.

Adulthood-The Middle Years