Buying and having a life insurance is one of the most important decisions that everyone should take in their life. Just as everything else in life comes with advantages and disadvantages, so does a life insurance. Do keep in mind, these disadvantages and disadvantages shouldn’t come in way of your decision to buy a life insurance. No matter what a disadvantage says, the life insurance is to secure the future of your family and for their larger benefit.
One should read these advantages and disadvantages so as to make up their mind about the type and category of life insurance. Therefore, read the list given below which has five advantage and disadvantage with respect to owning a life insurance.
Advantages of owning a Life Insurance
1. No more debts
It is okay if you have debts on you while you live, everyone can relate to this situation. But if you don’t wish to leave debts on your family after you, then it only makes sense if you have a life insurance. Life insurance will ensure that your family is not drowned in the misery of your debts but are liberated from it. Most families are ruined due to the debts left on them by their elders. Don’t let the same happen to your family if you love them. Debts and its ever-increasing number value could destroy the family and its future beyond repair. Therefore, if you want them to have a good life without any debts on the head, start up your own life insurance today.
2. Fulfill your family’s long-term goals
Having a life insurance doesn’t mean that you have been benefited by it only after the payee dies. You can choose from various categories of life insurance and take up the one which benefits you to achieve your long-term dreams. Such as, after retirement you could be benefitted by the life insurance which includes a plan that begins after your retirement phase. You can now enjoy a travel all around the world or buy a new house without worrying about the debts or salary.
3. The advantage to the Business Partners
There is a common misconception regarding the benefitting policy of a life insurance. The Business partners could also be benefitted by your insurance policy. If you contact a reliable agent he will most probably help you term base policies and divide the reward within the different time period. Many such small-scale startups or medium-sized businesses could be most benefited by the death policies of various long-term life insurance.
4. Benefits of Tax Saving
The most important and talked about the benefit of having a life insurance is that you are saving yourself a big amount of tax. The premium life insurance holders get the maximum cut on their tax repayment. If you didn’t know how this worked, here is an example. Suppose you earn 5 lakhs and pay a total of 1 Lakh for your life insurance, you would be liable to pay tax as a whole on the amount of Rs. 4 Lakhs and not 5 lakhs.
5. Flexible benefitting policies
Every life insurance holder should be a good researcher in order to ensure that you enjoy the policy on your own terms. You are always free to choose from all the options of the available company, policy, coverage, nominee and duration or payments. This is benefitting because after the policyholder dies away, the agent and the company will make sure that the entire sum of amount and assets goes to the nominated personnel.
Disadvantages of owning a life insurance
1. Age and premium cost
Many of the life insurance buyers did not know that the premium payment for one policy could be different for differently aged policyholders. In order for you to understand this, here is an example- suppose you are a 15-year-old teenager and have a father who is 41 years old. For a policy of Rs 15 Lakhs, the premium payment will be less for a younger aged person.
The premium cost goes up with every 2 to 5 years of age span. This could be one disadvantage for those who are seeking an easy-on-the-pocket life insurance.
2. Hoax companies
Although, Life insurance companies have to go through a thorough certification in order to set up as a legit life insurance company, yet we all come across such hoax incidents every now and then. These incidences have made people skeptic about investing in a life insurance policy to a company. These trust issues are not just the lack of a person’s ability to pay but the fact that a person invests in his hard earned money for the future benefit of his family. The only way to get over this issue is to do a thorough research on the company you are choosing the policy of. The other fact is that; prefer investing in established companies only. New setups which are usually a hoax gives out exciting and very lenient policies do not fall for them.
3. Complex Plans
Most insurance policyholders choose a policy without a good research. The drawback which comes with this is the fact that the holder knows nothing about the benefits of his own policy. And also the fact that other policies could be more favorable to one. The agents are to be blamed here who advise unfavorable policies in order to get commissions.
4. Drowning Insurance company
What if the company that you have invested in has drowned in its own debts before ensuring you the promised amount? This is a condition which will always be haunting you day and night. One can never predict for how long the insurance company is going to be safe before it goes bankrupt and you lose all that you have invested and also the fact that your family will not be getting any benefits after you. Therefore, as mentioned above, the only way to save you from this misery is by researching and investing in legitimate companies.
5. The unseen tricks
The insurance industry is one heck of an industry that no one is a master of. The only master of an insurance policy is the maker of it. Therefore, the complexity and terms & conditions of an insurance policy could make you all confused. No matter how much you research, there will be a few terms and conditions which will not be in favor to you. There have been thousands of conditions where the nominee is not given the repayment even after years of passing away from the holder.