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    Is Life Insurance only for the rich?


    With lives becoming more competitive, lifestyle patterns are changing faster than ever.

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    With lives becoming more competitive, lifestyle patterns are changing faster than ever. Life goals like marriage, buying a house, children’s education, and retirement make it necessary for our financial plans to evolve in order to meet these objectives within prospective timelines. However, a lot of times, the focus on ‘wealth creation’ makes ‘protection’ take a backseat. It is unfortunate that we don’t realise the importance of adequately insuring our lives for the financial security of our dependents, that life insurance must assume vital importance and other aspects of financial planning should follow.

    A life insurance policy is an investment that financially secures you and your family, against any uncertainty. It is a cover that takes care of the financial needs of people who are dependent on you, in case something happens to you. It is also one of the basic financial instruments that everyone needs to own. While there are several wealthy people who heavily invest in this instrument, it is equally important for people in different strata of life to invest in suitable life insurance plans.

    If you’re not sure about getting a life insurance, let us help you make a wise decision.

    If you have loved ones who depend on you financially, you must consider term life insurance that provides income replacement in case of untimely death. If you are a business owner, life insurance can help your loved ones pay off your business debts, estate taxes, or fund a buy-sell agreement. Also, is you have a co-signed student loans or credit cards, a term plan can cover the cost of your debt so you don’t pass it on to your heirs. Similarly, people with kids, single parents, affluent individuals - life insurance can offer peace of mind to people of nearly all ages and life situations.

    Here’s a closer look at why life insurance has to be the first step toward financial planning:

    A bundle of benefits
    Life insurance often gets the least priority in our financial planning; however, it is essentially one of the most economic and important investments one can make. Life insurance is not a product with quick or immediate returns but a scheme that covers your risks. It also offers protection to your loved ones, in case of any uncertainties. Low premiums, tax benefits and bundles of add-on benefits make life insurance all the more attractive. But the key takeaway has to be that everyone needs life insurance. Whether you enjoy an opulent life and want to secure your wealth or you have a family to support who can rely on the financial backing, life insurance is one of the most under-rated investments that needs your attention.

    Which plans do we choose?
    Now that we know the importance of life insurance, the question of making the right choice arises. The one-time investment plans or annual payment term insurance plans are a great tax-saving instrument that helps to secure your investments and protect your family. However, the biggest issue that people with lower-income face is the difficulty in making high-premium payments. However, there are different types of life insurances with comfortable premium payment options that are suitable for people in different earning spectrums. Since making lump-sum payments may seem like a burden, choosing life insurances with smaller monthly payments is a great way of making this burden much lighter. Term insurance plans that offer flexibility in the payment timeline, like HDFC Click2Protect Plus, is a great choice for people.

    The monthly and quarterly payment options is perfect for people who cannot shell out a big amount all at once, and the annual payment options allows others to make easy investments. Life insurance plans with annual payments are a great option for people who manage to allocate and save some money every year. In addition to this, the life insurance schemes offer tax benefits under section 80 C & 10 D of the Income Tax Act. This additional tax deduction adds to the benefits of buying a life insurance plan early on.

    The right time to invest
    While we know that life insurance indeed is a necessity for everyone, it is important to know the best time to invest in a life insurance. Choosing a simple life insurance plan at a young age plays a monumental role in determining the premium costs that we incur. Since the age factor is crucial in deciding premiums, people with lower-income who select a monthly investment plan in their 20s are bound to pay lower premiums than those in their 30s or 40s. As we grow older, the importance of life insurance in our investment kitty also increases. So the right time to invest is always now!

    There have been a lot of myths around investments that we have grown up with. The idea that life insurance is for the rich is one such myth, which has been popularised over a long time. What we need to remember is that life insurance is a necessity that everyone benefits from. While the reason behind choosing life insurance may be different for different people, the need for life insurance remains constant.

    (This article is generated and published by ET Spotlight team. You can get in touch with them on
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    6 Comments on this Story

    Gopalakrishnan Krishnan690 days ago
    In India all good things are for the Rich Only.
    Amalesh Bhattacharya712 days ago
    Yes poor are managing bare necessities shrinking budget no medical help, no travelling allowance, no big bank accounts, there will sooner lead to high aspiration syndrome?
    Bb Singh727 days ago
    While taking insurance policy, whether you are rich
    or poor, choose a correct company and do not get
    carried away only by attractive slogans like "zindagi ke saath bhi aur zidagi ke baad bhi".
    They will seldom pay back your money smoothly.
    Their grievance elimination procedure is worthless.
    I am not getting my payment by their Patna branch
    no 4 even after request after request also to their
    Regional and Zonal office for several years.
    So learn from my bitter experience.
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