What is The Purpose of Life Insurance?

Why is it Important to Have Life Insurance? 

Here are the top features of life insurance plans that make it an important component in your life: 

• Your Family’s Financial Security 

Securing your family financially is the most important feature of life plans. Your savings might not be enough to cover your family’s expenses. Having a life insurance plan takes care of your family’s needs in your absence. 

Such insurance plans provide a lump sum amount to the beneficiary after the insured’s death — this is called the death benefit. This can cover their day-to-day expenses, ongoing debts, future financial goals, and more. 

• Long-Term Planning 

Another main purpose of life insurance is the fulfilment of your or your family’s life goals even if you’re not there. For instance, with the death benefits of life policy, your family can easily provide high-quality education to your children, make arrangements for a grand wedding, and so on. 

• Wealth Generation 

Certain life insurance policies allow you to generate wealth while getting life coverage. With them, you can fulfil your retirement goals and future needs. Some of the prime examples of this type of life insurance include ULIPs, endowment plans, and more.  

• Debts Covered Even in Unfortunate Circumstances 

Next on our list of the key benefits and features of life insurance is the provision for debt coverage. 

If you pass away before repaying a loan, your family can use the death benefits to repay the loan. This can save them from the financial burden, such as the seizure of the insured’s account or estate. 

• Peace of Mind 

Ultimately, the main purpose of life insurance is to remove the stress of uncertainties regarding your family if you pass away. With the death benefit usually being sufficient for daily expenses, emergency funds, long-term goals, and more, you can be assured that your family can continue their lifestyle even amidst unfortunate circumstances.