Most of us live in a belief of immortality; to us early deaths, families going through bad times are only stories that we hear from a friend or about our friends or distant relative or a neighbor. We sympathize with them but ignore the odds that something similar can happen to us which will leave one's family in despair and financial deprivation.

The irony is that we buy car insurance without a second thought because it is mandatory. But we ignore life insurance, which is more important for our family. Life insurance is needed for everyone who makes an economic impact to somebody else's life. At any point in time one should have planned in such a manner that in one's absence, the family will not need to compromise on their current lifestyle and yet-to-be fulfilled needs. In an ideal scenario, one should at least have a life insurance cover equal to one's annual income multiplied by number of years to retirement. However this amount is just a starting point and must be put into the context of other liabilities, expenses, inflation and current ability to set money aside for it.

The decision to over-scrutinize or ignore the decision to purchase a life insurance puts the family in a great risk of financial hardship in absence of breadwinner.

  1. I am single. I don't need life insurance!
  2. Life insurance is a necessity if you have any sort of financial obligation. You may be running some loans or have credit card outstanding at any point of time. In your absence your Parents will have to repay them back to bank. Life Insurance can help you cover such liabilities and relive your family from your financial obligations.

  3. I am young and fit. Why should I take life insurance?
  4. Life insurance is all about covering the financial void in your absence for your family - a sudden death of young and healthy person due to accident or disease can deprive the family of sound financial future. On the contrary, it actually makes a financial sense to buy life insurance if you are young as it helps you lock in lower rates (Premium) and guaranteed coverage. This especially helps because later in life you may develop health issues and will not be eligible for insurance or will have to pay a heavy price for it.

  5. I don't have kids. Why do I have to think of Life Insurance?
  6. Such a wrong thinking. Kids or no kids should not stop you from going ahead and buying a life insurance because it secures that comfortable lifestyle and provides a safe financial future for your spouse in your absence. Your spouse will still have to manage the loan EMIs and monthly expenses. This will be more difficult if your spouse is not working, as it will take time for a career onset, which may further require education or training. With life insurance, your spouse can cope up and move ahead in life.

  7. My employer provides me life insurance cover. I don't need more.
  8. There is a difference between having a life insurance and having adequate life insurance. The right amount of life insurance can completely replace your future earnings potential till your retirement age in your absence. Many companies provide a cover, which is 2 times the annual salary of the employee. However the benefit may be just enough to support the family for a year or two. Another consideration is that how long you wish to stay with your present company. Life insurance is a perquisite and will last till you are with that company. When you leave your company it may be too late to take a new life insurance cover or too costly when you actually need it.

  9. My spouse is the primary earner and is adequately insured. Why should I buy?
  10. Your spouse may be adequately insured and he/she may not be completely dependent on your income. But as a career women or a homemaker you still in many ways take on the responsibilities and your income impacts the standard of living of the family. For instance you save your income for your child's education or for the down payment of the house or as a homemaker you are running household, taking care of the kids, cooking etc. In your absence life will become more challenging and expensive for your spouse. He/she may have to hire help or change his/her work habits to accommodate a new lifestyle in your absence. Hence , you should buy life insurance as it can help in reducing the burden for your spouse and maintaining the standard of living.

  11. Life insurance does not give any returns.
  12. Many people compare life insurance with an investment product; however it's not about returns but about peace of mind. Life insurance covers the cost of dying too early; by paying a few hundred dollars every year one could avail in millions. Imagine a situation where the life insured dies after purchasing a policy , term insurance would give his or her family a lump sum amount to your loved ones to sustain their lifestyle and unfulfilled goals.

  13. Life insurance is very expensive.
  14. Expensive is a relative term and for life insurance it has to be looked in the context of the cover you need, ability to put aside money for it and the provider-you choose. The premiums for life insurance have almost become less than half of what was offered 10 years back. There are many life insurance plans now available online. Shop, compare and save and buy from those who offer you guaranteed returns for your policy.

  15. I can defer buying this policy for a few years. What's the hurry?
  16. Life insurance is like a spare wheel for your car. If you do not always have it along, you may repent at the time of puncture. Similarly one should not speculate death to decide on purchase of life insurance. You need life insurance till the time you accumulate sufficient liquid assets and/or have reduced dependence. If you die without the coverage for your loved ones depending on you for finances there may be no other means of provision after the depletion of your current assets.

  17. It's a hassle to take life insurance.
  18. In this era of internet , you can apply for life insurance online through a simple application process which takes around 10-12 minutes . You can calculate the right amount of insurance by - filling in a few basic details on the website. In case of medical examination required , the company representatives help you in getting your medical test done. The policy document is delivered on your email id. All of this is simple and done through a hassle free process.

To conclude, with - regard to the need of life insurance, here are some key points: One, you shouldn't leave Life Insurance out of your financial plan unless you have enough assets for your family after you are gone.

Two, now with the internet, it's so convenient to search for convenient plans, understand right amount of cover by getting lowest quotes online, compare premiums, and purchase a plan which best suits your pockets and needs. Explore these plans on your own pace with no high-pressure sales tactics.

Three remember to review your life insurance coverage every 3-5 years. Choosing a Life Insurance is a smart and a cost effective way to financially secure your family. Buying a life insurance plan is a gesture that shows you really care for your family.