Life Insurance – The Impact of Putting Off this Important Financial Decision

Published by Sharekhan Education | April 9, 2021

Life Insurance – The Impact of Putting Off this Important Financial Decision

“Call me back later”, “I will talk to my CA” are some of the common excuses given by many individuals in a bid to avoid taking a life insurance policy. What is puzzling is, “Why do people tend to ignore their most important responsibility” i.e. securing their family’s financial future? Shouldn’t this be a first priority? Isn’t life insurance that important tool which can help your dependents mitigate financial distress in your absence?  Why then procrastinate and put off this most important financial decision? Consider finding peace by ensuring your loved ones’ financial security through timely decisions. Remember  life is a onetime offer you need to use it wisely. Procrastinating will not help.

Just imagine if you were shouldering a big burden of liabilities; a home loan, an auto loan, a personal loan and have been putting of the decision to take adequate life insurance for tomorrow and this tomorrow never came. Who would suffer? Your family of course! If your spouse or any other member is capable of shouldering your responsibilities then great, but what if not; looks like you are finding it very unsettling and difficult to even imagine this, right?

For ages life insurance has been portrayed as an investment vehicle but in reality it is not so. Life insurance is vital for risk management, ensuring family financial security in your absence. It is a contract between you and the insurance company. A contract whereby you promise to pay premiums regularly and the insurance company promises to pay the claims on the happening of the stated events. It thus gives you an assurance that in case something was to happen, the proceeds would be handed to the beneficiaries.

Let us therefore understand the impact of putting off the decision to take adequate life cover, which could be more of a problem if you are the primary bread winner and responsible towards your family’s financial future.

1. Your family will suffer:

This is obvious isn’t it? If you are the bread winner the entire family is dependent on the income that you bring in. Any eventuality will not only cause an emotional loss but also financial stress. Procrastinating can make your family suffer; it would be wise to take this decision on time.

2. Goals will remain unfulfilled:

Everybody has financial goals; maybe you too have been planning to send your children to the best of universities abroad, a theme wedding for your daughter or a foreign vacation with the family. Whatever the goals, your absence will shatter these dreams. This is where life insurance can help. If you have taken adequate cover then the proceeds from your life policy may prove useful to fulfiltheir life goals.

3. Unpaid liabilities can bring your family to the streets:

Have you ever given a thought to this important reality? If your home loan EMIs is not paid in time then the bank can possibly take away the very roof from over their heads. Had you taken that life insurance policy in time, this situation could have been avoided. Remember Life insurance policy can work as collateral against your home loan and the proceeds can be used to pay off the balance loan ensuring a roof over your family’s heads.

4. Compromised lifestyle:

Maybe you have managed your life well and have no liabilities to worry about but it is possible that the family may have to really go frugal or may have to live a compromised lifestyle in your absence. Their Now is adequately provided for but what about their future? An adequate life cover could have provided that extra income to help them lead a normal lifestyle even in your absence.

To wrap it up…

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