IMPORTANCE OF LIFE INSURANCE IN OUR LIFE

Life Insurance
A life insurance policy is a contract with an insurance company. In exchange for
premium payments, the insurance company provides a lump-sum payment, known
as a death benefit, to beneficiaries upon the insured's death.
Typically, life insurance is chosen according to the need and demand of the insured.
Term life policy provides insurance for a certain period of time while whole life or
permanent life police provides cover for the whole life in return for premium
payments by the insured. The point to note here is that benefits form all types of life
insurance are income tax free.
There are many types of life insurance, the most common are described below.
● Term Life Insurance
● Universal Life Insurance
● Whole Life Insurance
Comparison of types of life insurance

Term Life Universal Life Whole Life

Insurance
Insurance Insurance

Needs it helps meet Income replacement Wealth transfer, income Wealth transfer,
during working years protection and some preservation and,
designs focus on tax-deferred wealth
tax-deferred wealth accumulation
accumulation

Protection period Designed for a specific Flexible; generally, for For a lifetime
period (usually a a lifetime
number of years)

Cost differences Typically less Generally more Generally more

expensive than expensive than term expensive than term
permanent

Premiums Typically fixed Flexible Typically fixed

Proceeds paid to Yes, generally income Yes, generally income Yes, generally income
beneficiaries tax-free tax-free tax-free

Investment options No No2 No

May help build equity No Yes Yes

VALUE OF LIFE INSURANCE
As we grow older, get married, build families and start businesses, we come to
realize life insurance is a fundamental part of having a sound financial plan.
Depending on your needs and type of the policy life insurance is fairly cheap so
there is no excuse not to get it. Moreover it's a source of satisfaction to know that
money will be available to protect your loved ones in case of your death. Here are a
few other reasons why life insurance is important in our lives.​TO PROTECT YOUR
FAMILY AND LOVED ONES
If you are the financial support of your family and they depend on you for their
livelihood, then life insurance is must for you because it replaces the income when
you die. This is most important for parents of children or even adults who can not
sustain the standard of living if their parents are no longer available to provide.
TO PAY OFF DEBTS AND OTHER EXPENSES
In addition to providing finances for day-to-day expenses, your family needs money
to pay any outstanding debt, like mortgage, credit card bills and any other loans.
Other expenses ​include funeral and burial costs that can easily run into the tens of 
thousands of rupees. Y ​ ou don’t want your spouse, parents, children or other loved 
ones to be left with any extra financial burden​ in addition to the emotional burden 
they’re already suffering​. 
TO ADD MORE FINANCIAL SECURITY 
As parents you want that your kids will be well taken care of when you are not there 
for them. You also want them to get a quality education but also provide for other life 
ventures like getting married or starting a business. For this purpose additional 
coverage is important when your kids are still at homme. 
TO BRING PEACE OF MIND  
We can’t know when we will pass away. it will be today, tomorrow or 50 years form 
now, but it will happen eventually. No money could replace a person. But life 
insurance provides protection for uncertainties in life. Having life insurance surely 
brings you and your family peace of mind. It’s one thing you can be sure of and you’ll 
no longer have to worry about the taken care of your family when you’re gone. Life 
insurance protects your ​successors​ from the unknown and helps them through an 
otherwise difficult time of loss. 
CONCLUSION
Some people mistakenly believe that life insurance is a scam. This is due to the fact
that the money for premiums is lost if death doesn’t occur during the coverage period
(in the case of term insurance), or because many people live to a ripe old age and
continue to pay their permanent insurance premiums. Such naysayers compare life
insurance protection to gambling, and forgo the protection entirely.
Every person gas to die but nio one knows that it will be today, tomorrow or 52 years
form know
The loss of a loved one is an emotional and traumatic experience for any family. But
not having enough money to meet immediate and ongoing living expenses, can
make a very difficult situation even worse. Not only are the people you love grieving
your loss, but they'll now have added financial stresses to cope with. Depending on
their current financial resources and ability to get back on their feet both emotionally
and financially, your loved ones could be forced to move to a less expensive home
or community, forego education and career plans, and cut back on their quality of
life. They may be even forced to take out loans to pay for your funeral and burial
costs, as well as any outstanding medical or tax bills.
In short, life insurance has become an inevitable need in our lives nowadays. Now it
has become a necessity for every family to protect them from financial difficulties and
to maintain their life standard after the death of the earning hand of the family.