Why You Need Financial Planning
Financial Planning: Life is an important journey. There are many types of financial targets in this. Along with the same target, many unexpected situations also come to the fore.
Well, you always want to ensure a secure future for yourself and your family and this can be done with a good financial plan.
But in financial planning, it is necessary to decide that the financial security of your family should not only be there while you are alive, but also after you. For this, you have to include one special thing in your portfolio and financial planning.
This is life insurance with an even longer duration. As your age increases, the importance of life insurance also increases.
Here we will know for what reasons it is necessary for you to include life insurance in your financial planning.
Financial Security and Stability of Loved Ones
Life insurance coverage will provide financial security to your near and dear ones, especially family.
What happens in this is that you take insurance coverage on your life and in return pay a fixed premium to the insurance company over a fixed period of time.
In case of death of the insured, the sum assured is given to his family. If there is any additional benefit, that too is given in the form of financial assistance.
Helpful in Long Term Goals
If you take a life insurance policy, then with its help you can focus more on long-term goals. Rather, life insurance policy will also help you in this work.
ULIP is a good option for long term life insurance policies. At the same time, endowment plans also help in meeting financial goals. This ensures that your investment grows over a long period of time.
Benefits of Investment and Savings
Various types of life insurance policies (ULIPs and endowment plans) also serve as a retirement and investment tool.
The sum assured you pay keeps on increasing with multiple cumulative benefits. These include Simple/Compound Incentives, Set Bonus, Reward Benefit etc.
Easy Debt Management
With a life insurance policy, you can also take advantage of the benefits of risk management on debt and loans.
A life insurance policy with a policy term equal to the repayment term of the outstanding loan will reduce the chances that your loan will not be repaid in case of your untimely demise.
Hence, after your demise, your family will not have to worry about loan outstanding.
Tax Saving
Another major advantage is that the premium you pay for your policy will be eligible for tax exemption under section 80(80C) of the Income Tax Act, 1961.
That is, life insurance also works as a good option for saving on tax. Moreover, as per section 10(10D) of the Income Tax Act of 1961, the insurance income that you get from your life insurance policy will also be tax free. You should take a little more insurance cover than you need.
