If you have enough funds at your disposal, you don’t need life insurance…or do you? It’s difficult to say today whether you need life insurance or not. But it is important that you secure your family so that when you are not around, they have financial back-up. Why is financial back-up required? So that your family does not have to contend with financial hardships when they are without the support of your income. life insurance is the best way to ensure that you have a sure amount available for your family when they do not have the luxury of your income.
Why life insurance?
Without life insurance, your family will have to depend on borrowings or on your savings. Life is unpredictable In the event of your untimely and unfortunate demise, you may not have accumulated enough savings to provide for your family to live the same kind of lifestyle that they were living when they had your income. With lifestyle, at whatever stage of life you leave them, they are assured of getting a fixed sum of money and hence they can still enjoy a decent lifestyle. This is true for both a salaried as well as a business person.
A salaried person
A salaried person brings home a fixed sum every month. With this amount, the household expenses are managed as well as financial liabilities paid off. If the family would have to live without this amount, it would be very difficult to manage for them without it. Hence an income replacement is necessary for them. If you as the breadwinner, take a life insurance policy selecting monthly income as the payout option, your family will have a monthly income with which to sustain themselves. This would give them the much needed financial support.
For non-salaried persons, every month is different. For most businesspersons, depending on the type of business, unlike the salaried person, they do not draw a fixed monthly income. They manage their finances differently each month, except for some regular payments like children’s school fees, home loan EMI’s etc. If you are a businessman and your family depends on your income, it is important for you to ensure that your family has a fixed amount to manage their financial expenses. If you buy a life insurance policy and select the option of a lumpsum payment to your nominees, your family will have a financial back-up in your absence.
So, even if you are a salaried person or a business person, you would do good to give your family the financial back-up so that they have a replacement for your income that will help them live with their heads held high.