Insurance Policy

21 Reasons Why People Buy Life Insurance

There are 100 reasons why you should exercise. There are 50 reasons you should save money.  How many reasons are there to invest in a life insurance policy?

“There are worse things in life than death. Have you ever spent an evening with an insurance salesman?” Woody Allen:

People have many reasons for what they do. Everyone has their own reason for their own action. But it is interesting to know these reasons as it can make you think the larger perspective of the things.

Here is a list of 21 reasons people buy life insurance policies.

  1. To Protect Spouse

Life insurance policy helps the spouse to sustain the life after the death of the earning spouse. This is perhaps the top reason why people buy a life insurance policy.

  1. To Protect Children

It supports children’s education cost when the insured dies suddenly. Even as an investment children policy helps in managing the cost of their education and marriage.

Life Insurance Kids

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  1. To Protect Parents

By making aged dependent parents beneficiary, life insurance policy helps them to sustain in case any untoward incidence happens with the insured.

  1. To Build Wealth

Long-term nature of life insurance policy plays a key role in building wealth along with the insurance benefits.

ULIP Wealth Plus is the policy which is designed to create wealth.

  1. To Invest Surplus

Life insurance is a good option to park savings. It earns a return and protects the family.

  1. To Plan Retirement

Life insurance could be an ideal investment for retirement planning. A retirement plan is a source of regular income post the retirement.

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  1. To Protect Loss of income

Loss of income due to injury or hospitalization or disability can be covered under some life insurance policy. This is a good reason to buy such policies.

  1. To Cover Loans

If you have incurred debt, it is advisable to protect the loan with the life insurance policy. This eases the burden on your family in case the insured borrower dies.  The policy amount takes care of the repayment obligation.

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  1. For Valuable Riders

Sometimes a life insurance policy with attractive riders can be a reason to invest in a policy.

These riders might not be available when you first invested in the policy.

  1. For Tax Benefits

This is another major reason for people to invest in a life insurance policy. Section 80 C offers deduction from income up to Rs.1,50,000/- for payment towards the life insurance premium.

The maturity proceeds of most of the life insurance policies are tax exempt.

  1. For Business Continuity

The Key-man policy helps businesses to cover the life of the key persons.  In case the key person dies, the policy money helps the business to run the show for some time until the business stabilizes again.

  1. For Peace of Mind

This is the end result of investing in any life insurance policy. Your family is protected financially is the feeling which gives peace of mind.

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  1. For Employee Benefits

Yes, this also is a reason why entrepreneurs buy life insurance policies for their employees. This is a good human resource practice.

  1. To Oblige Agent

This is also true in many cases. But this proves valuable when the benefits of the policy accrue. The insured or the family get a lump-sum amount when they needed the most.

  1. For Novel Features

Sometimes new policy comes with novel features. In order to avail the benefits of this feature, people buy the policy.

in recent times many companies in order to innovate come with unique features.

  1. To Gift Someone They Love

The best gift a brother can give on this Raksha Bandhan. But why only on Raksha Bandhan, this could be a good gift anytime for someone you love.

  1. For Ease of Liquidation

Liquidation is easy for some life insurance policies without a lock-in period. Loans can be availed against the policy.

  1. As Herd Mentality

Everyone is doing it, so it should be good for me, this kind of mindset is also one of the reasons people invest in the life insurance policy.

  1. To Protect Against Critical Illness

Some new policies cover critical illness benefits. Here the benefits are available on the diagnosis of select disease. Future premium is also waived. This is a good reason to invest in such a policy.

  1. For Safety of Money

Safety of the money is usually guaranteed as most life insurance companies are safe. IRDA makes sure no policyholders suffer due to the bad financial health of the insurance company.

  1. To Die Peacefully

Having sufficient life insurance policy makes people die peacefully without worrying about dependent family members.

You can laugh at some reasons. You can ignore some reasons. You can evaluate some in your own context. You can also add your own reason different from these reasons.

Do you invest in a life insurance policy for any other reasons? If the answer is Yes, you may share the reason for the benefit of other readers.

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