To put it simply, a life insurance policy is basically a contract between two parties - an individual and an insurance provider. Here, the insurance provider agrees to provide a predetermined sum of money as life cover for the individual for a certain period of time.
And in the event of the individual’s death during the specified period of time, the insurance provider would pay the predetermined sum of money to the individual’s nominee as a sort of a financial compensation. The affected family can then make use of this financial compensation that they receive as they see fit.
The individual, in return for receiving this life cover amount, would have to make regular periodic payments to the insurance provider. These payments, also known as premiums, are essential for providing the life cover.
Now that you’ve seen the features of life insurance, should an individual who is newly-wed, invest in one? If so, why? Let’s take a look at some of the reasons why you may consider purchasing a life insurance plan after your marriage.
Reasons for Buying the Life Insurance Plan When you Marry
Marriage would mean added responsibilities. And one of those responsibilities include being able to provide a stable financial cushion for your spouse and your future children.
There’s not one, but many reasons why you may invest in life insurance plan as soon as you get married. Here’s a quick look at a few of them.
1. It provides your family with a financial cushion
As you’ve already seen above, one of the primary objectives of life insurance is to provide your family with a financial cushion. And since life can be extremely unpredictable, it is crucial that you act immediately to secure your family’s financial future through the assistance of a life insurance policy.
In the event of the policyholder’s death, a life insurance policy can provide his/her spouse and children with the necessary financial support required to take care of their daily expenses and fulfil their life goals.
2. It helps take care of your financial obligations
Considering the fact that newly married individuals are stepping into the next stage of their lives, they might want to satisfy certain life goals like owning a new house, Purchasing a car, which may require the help of a hefty loan.
Now, if any one of the spouses, especially the breadwinner of the house, faces an untimely death, the entire burden of repaying the debt would fall on the surviving spouse. This can unnecessarily stress their financial situation. However, with a life insurance plan, the surviving spouse may make use of the death benefit payout to settle all of the unpaid financial obligations without having to dip into their savings.
3. You get to enjoy the benefits of investment
Not all life insurance plans provide only the death benefit. There are many different types that also give you maturity benefits by investing the premiums that you pay in various financial instruments. This way, you get a dual benefit of both insurance and market-linked investment.
The ability to earn market-linked returns on your life insurance investment is another major reason why married individuals may opt for this. The maturity proceeds that you receive upon the end of a life insurance plan can be used by you to satisfy your needs and requirements, no matter what they may be.
4. It can help you plan for your retirement
Now, although you may have just embarked on a new journey together with your spouse, keeping your retirement in sight is always a good thing. And what better way to plan for your retirement than by investing in a life insurance plan?
The maturity benefits that you receive at the end of the policy term may be used to provide for you and your spouse after your retirement. Alternatively, you can also invest the maturity benefits in an annuity plan to receive a steady source of income till the end of your life as well, allowing you to live your life financially independent.
5. You can create an inheritance for your family
This is another one of the many benefits of life insurance. With an appropriate insurance plan by your side, you can leave behind a handsome inheritance for your children by simply naming them as the nominees for the policy. This will allow them to receive the death benefits under the life insurance plan without any hassle.
6. It can cover medical expenses
Almost all kinds of life insurance plans come with the ability to add riders. These riders help enhance the coverage provided under the plan by providing additional benefits at nominal extra cost. And one such rider, the critical illness rider, helps cover medical expenses that you may incur in connection with any of the illnesses specified under the rider.
On first diagnosis of any of the specified illnesses under the critical illness rider, a rider sum assured is disbursed to you immediately, which may be used by you to pay for your treatment. This is in addition to the death benefit specified under the base life insurance plan.
Considering the fact that healthcare expenses are seemingly on a rise every single year, life insurance can help lessen the financial burden by covering a part of the expenses.
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