Why Life Insurance is Essential for Financial Protection and Peace of Mind

What comes to your mind when you think of the term- life insurance? Some may feel that it is something complex and avoidable, while some may find it unnecessary, especially with many other avenues to create wealth today. Yet, nothing matters more than adequate life insurance coverage for yourself and your family. After all, there’s always the need to ensure suitable financial protection for your loved ones in case of unpredictable and unfortunate scenarios. And then there comes in the element of mental peace. Once you know your near and dear ones are secured, you’ll naturally be able to focus better on your career, investment goals, and other pursuits.

So, on that note, here’s looking at why this product is vital for every individual and household today.

Life Insurance Is a Necessity in Today’s Times

Let us tell you a story that will illustrate why life insurance matters immensely for everyone. A fit and healthy corporate professional of the age of 35 (let’s call him Pradeep) was working as a manager in a leading MNC. He had married by then and had a young son who was just 4 years old. Pradeep was his family’s primary breadwinner or earner and brought home a hefty salary of Rs. 2 lakh per month. He also had debts in the form of a home loan of about Rs. 50 lakh, along with a car loan of Rs. 10 lakh. Then, his education loan was taken for his management education (about Rs. 15 lakh), which he was repaying. Despite all these loans, he could still save around Rs. 70-80,000 per month and thus lived a lavish lifestyle, putting some of it into mutual funds, SIPs, stocks, and so on.

Pradeep never thought that life would strike him and his family in the most unfortunate manner since he was fit and healthy and worked out each day. However, due to a hidden genetic condition (as the family learnt later), he had a sudden stroke at work and passed away, unfortunately, at a young age. This left the family in the lurch, since they would now have to pay debts amounting to Rs. 75 lakh and savings and investments amounted to only Rs. 15-20 lakh. Pradeep’s wife had issues in finding a job since she had taken a break from work after the birth of her child. His elderly parents could not chip in much either. Ultimately, they sold the house to repay debts and shifted to a rental property, somehow managing on limited income.

This is not an isolated story. It can happen to anyone, including You.

This is why life insurance matters immensely since it offers much-needed financial support to the family in such scenarios. Had Pradeep chosen proper life insurance coverage, the assured payout to his nominee (spouse/child) would have helped the family clear debts and maintain their living standards without any compromises or selling the house. They could also have a base to fund the child's future education and meet other goals.

Concluding Notes

This is why you should not neglect the importance of life insurance in today’s uncertain times. Make sure that you choose coverage that is at least 15-20 times your yearly income or even more (provided you can afford the premiums for the same). This will help you get mental peace, knowing that your family can still meet all costs and goals without depending on others or compromising on the latter.