Looking forward isn’t always easy, but you can still make the most of your financial future by having a sound financial plan.
Being financially secure is important to keep peace of mind and take care of any unforeseen expenses. With a financial planner, you mitigate risk over time and have a set plan for meeting your goals.
Individuals looking to plan their finances should consider including life insurance as they age and make important life decisions, such as getting married, buying a house, starting a family or planning for retirement. In this article, we will walk you through the reasons that make life insurance a necessary financial planning tool.
Life Insurance: What is it and Why should I Buy It?
A life insurance policy can be a very smart financial product to include as part of your financial planning in the event that you pass away unexpectedly. A life insurance plan can provide you with the peace of mind that your loved ones will be taken care of financially in the event that something should happen to you. It gives you a chance to accomplish your goals and sets them up for success as well. Here are just a few reasons why:
1. It can secure your loved ones
Life insurance covers are not for profit, meaning that when you make death-related cover payments to an insurer, this money does not go to the insurance company – it is used to pay off a life insurance beneficiary. Your family will be compensated with the sum assured and any other benefits specified in your policy in case of your unfortunate demise.
2. Picking long-term objectives is a rather important task.
You should always look out for the more difficult tasks and make plans for them early on. For example, you need to start looking into getting a house or vehicle, sending your kids to college, getting them engaged, and retirement. You can meet your long-term financial goals with help from a life insurance policy that provides adequate coverage and maturity benefits. Download our free guide to the best long term life insurance policies, find out which one is best for you and your family. By choosing to invest in our company you’ll be able to grow your money an ensure a secure financial future.
3. Investments & Savings can give you a wide range of benefits.
ULIPs, endowment plans and other types of insurance have been used as a retirement and investment tool for years. The amount insured increases with the various cumulative benefits that you receive over the life of your policy. These can include simple/compound incentives, set bonuses and reward benefits, to name just a few.
4. It can help you manage debts
With a life insurance, you can also enjoy the peace of mind that come with having a risk management plan in place. Picking one with the same term as your repayment period will make it harder to fall behind on repayments while still benefitting from such protection in the future. That’s why none of your loved ones need worry about outstanding loans & mortgages after you’re gone.
5. It can help you save on Tax
One of the benefits of life insurance is that the premium you pay can have a tax break under the provision in section 80 (80C) of the Income Tax Act of 1961. This means that not only are you insured, but you’re also saving on your taxes! Adding to this, according to section 10(10D) of the Income Tax Act of 1961, the insurance proceeds you get from your life insurance policy are also tax-free.
The 5 Steps To Make An Effective Financial Plan
Creating a successful financial plan requires constant analysis and adjustments. Effective plans include the use of Tracking tools and a mindset that’s always on-point. Here are five suggestions to decide upon:
1. Evaluate your current financial status
To develop your financial plan for the future you need to examine what’s going on with your finances now. Income, expenses, investments, and debt are all important factors in determining this- as well as your satisfaction with work or life balance.
2. Set up your financial goals
It’s important to determine and separate your short-term and long-term goals when you’re planning your financial future. Listing them out can help you get a better idea of how to chart the timelines of your financial plan. You should include things like the age at which you want to marry, purchase a house, retire or start a business.
3. Pick the right investment strategies
It can be hard to decide where to invest your money when you don’t have a plan in place. Having a cash flow statement can help decide the right asset classes for your portfolio and will help you achieve your financial objectives. For example, a ULIP (Unit Linked Insurance Plan) can let you get a return on your investment that is linked to the market. Or you can choose Guaranteed Income Plans if you are not interested in risk and want guaranteed returns.
4. Select the ideal life insurance policy
When you know what type of life insurance you need, it is important to chose the one that suites your requirements. A popular example is the term plan, which might be perfect for people who just want cover in case anything happens during a set period of time. Anyone who has any other life goals should seriously consider a ULIP or an endowment plan.
5. Revisit the plan periodically
Once your financial plan is in place, it is imperative that you commit to it. Once created, a financial plan needs to be followed and evaluated constantly. It’s important that you keep a check on it, and be aware of the performance of your investment plans. The key to achieving your financial goals is to constantly monitor things and see if they need changing. The reality is that your needs will change over the course of time, so you’ll have to be prepared and adjust your strategy accordingly.
Including life insurance in your financial planning is a great way to ensure future financial stability for your loved ones in the event of an accident or illness. This is just one example of a vital item that should be included in any well-rounded portfolio. If you want to reach your financial goals sooner and get the best life insurance coverage, then don’t hesitate to buy.
It is in your best interest to buy life insurance at the earliest possible age. Premiums get exponentially higher as you grow older and because of that, buying an insurance policy when you are young will be a much more beneficial decision for you financially. It takes a lot of thought and self-examination to decide on appropriate savings strategies for the future. However, you must regularly reassess these in order to be in tune with your evolving life goals.
Since life insurance is so important, it’s crucial to choose a reliable and reputable insurance provider, like Edelweiss Tokio Life Insurance. Whether you are looking for the most basic plan or the perfect one tailored to your needs, they have options that fit everyone. Visit their website today and find out!
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