We know that you love your family and want to do everything in your power to earn a better living for them. However, have you ever wondered about their financial health when you are no longer there to provide for them?

Well, more often than not, individuals forget to provide for the financial well-being of their dependents. As a result, the dependents are left with little to call their own. To escape such trouble for your family, we would advise you to take out a life insurance policy.

A Life Insurance policy, primarily, is a contract entered upon by the insured and the insurance provider. As a part of which, the insurer promises to pay the beneficiaries of the insured, the pre-decided policy claim. Also, there are various other life insurance plans that offer retirement benefits, college fund benefits, and more.

There is a plan for every need under life insurance which you can use to cover a multitude of financial uncertainties. Here are five reasons why you need Life Insurance.

1.    To Protect Your Family Home

As we have already discussed, the primary objective of taking out a life insurance plan is to protect the financial health of your family. And, one of the significant aspects of economic well-being is having the right to live in their family home secured.

However, this right can be threatened with your death if you had taken out a considerable mortgage against the property and were using your earnings to pay it off. So, you can take out a life insurance policy against that mortgage to pay it off in case of your unfortunate and untimely death.

For such situations, you can either take out a Decreasing Cover policy or Level-Term policy. While the cover of the decreasing cover policy keeps on reducing with the decrease in the amount of mortgage, the benefits of the level-term policy are paid out when you die within the term of the policy.

A level term policy is ideal for paying off interest-only debts after your departure.

2.    To Fund Your Children’s Education

It is your children that are most vulnerable to the event of your loss, as it can have a heavy impact on their education and overall development. Therefore, it is advised to provide as much as possible for the kids when you can. In this way, they will be left with enough to support themselves when the time comes.

First of all, to support the education of your children, you need to combat the ever-rising cost of private education in schools, colleges, and universities. For this, you can take out a Maturity Life Insurance policy, which will payout when your children reach maturity. They can use this money to pay for tuition fees and support their adulthood.

Furthermore, when you have life insurance in place, the payout will help them to cope with the financial strain of losing a cushion when they are still young.

3.    To Protect the Interests of Your Partner

Often, people forget to put as much value to the work of their non-earning partners as they should have. As a result, all the efforts they put into maintaining the household and raising the kids go unnoticed.

While this might not cause a lot of ado when you are around to take care of your spouse financially, who will provide for their well-being after your departure?

Therefore, you need insurance to protect the life and expenses of the non-earning partner.

Furthermore, there is a ton of invaluable support that you get from your non-earning partner that needs to be insured too. Therefore, to secure your family against the financial burden brought in by the death of your spouse, you need to get their life insured also.

4.    To Fund Your Retirement

When you are considering retirement options, you need to prepare your finances for the worst-case scenario. Even if you have an employee benefits programme that is paying you the pension, you should check if it will support your spouse after your death too. If not, you should have a life insurance plan in place to help your partner after your death.

It is not only the expenses that will fall upon them later into the life that needs to be covered. You also need to make provisions for the funeral expenses because they can be pretty expensive too. For this, you can take a 50+ Life Cover which will provide enough for your family to organise a peaceful ceremony after you pass away.

5.    To Create an Inheritance for Your Children

While you do not have enough assets to provide as an inheritance to your family, you can always invest in a life insurance policy that pays out enough to pass on as inheritance.

You can name your heirs your beneficiaries so that they receive the claim of the policy and can use the money to start a life of their own.

Apart from an inheritance, the life insurance policy payouts can also be used to cover your family’s finances against inheritance tax. Inheritance tax is charged against the value of estate or assets one inherits, the amount of which can dig a hole into the finances of the recipients.

Conclusion

Therefore, you need life insurance to cover your family against the burden of inheritance taxes when you leave behind an estate.

Now that you know why you need Life insurance, you should also know that its cost is calculated on the basis of your age, health, and lifestyle habits. The healthier you are, the lesser will be the premium. Also, you can take out mortgages on whole life policies as their claim is certain to be received when the insured dies.

At the end of the day, it is the peace of mind that you are looking for from your life. And, by having your family’s finances taken care of, you can achieve that. All you need to do is make sure that you apply for the right life insurance plan as early as possible for the best benefits.