It is a dream come true to marry your loved one. However, while starting this new chapter in life can offer a lot of joy, it also opens the door to new duties and responsibilities. For example, one of the most critical responsibilities after marriage is a financial obligation towards a spouse, children, and other family members.
This duty might be especially crucial if you are the sole breadwinner. Even if your household is supported by both spouses as co-income earners, it is smart to purchase life insurance. By purchasing a life insurance policy, you can financially protect your partner and the rest of your family in case of your absence.
Additionally, certain life insurance products like Unit-linked Insurance Plans (ULIPs) might offer you a chance to secure your loved ones’ financial future while creating wealth through market-linked investments. If you have recently tied the knot, this article is for you!
In this article, we will list 5 major reasons for purchasing a life insurance plan. We will also look at ways you can get the most benefits from your policy. Let’s start!
Why Should You Purchase Life Insurance After Marriage: 5 Major Reasons
We have mentioned some major reasons why you should purchase life insurance after marriage.
To Secure Your Loved Ones from the Loss of Income
It is difficult enough for a single person to manage with rising inflation, daily living costs, and other escalating expenses. When you have a spouse, these costs increase significantly. While your income will suffice till you are there to support them, there needs to be a plan in place to safeguard them financially. If your partner is left behind in case of your untimely demise, having life insurance coverage will help them cover their living expenses and other necessities.
To Deal with Emergency Situations
Life, as wonderful as it is, can also be unpredictable. Accidents, terminal illnesses, critical illnesses, and physical injuries/disabilities induced by accidents are all very possible. Recovering from such circumstances requires significant financial resources. Specific riders (add-on benefits) offered with life insurance policies, like critical illness rider and accidental total/partial disability rider, might assist you and your partner in dealing with such unforeseen emergencies.
To Pay Back a Loan or Debt
Married couples frequently take out loans together to fulfil their long-term goals like purchasing and owning a home, a vehicle or funding their child’s higher education, among other things. In case of your unfortunate demise, you would not want to leave your spouse behind to bear the full weight of loan repayments. Again, the payout of a life insurance policy can assist with loan payments and cover your family against these liabilities.
To Create Wealth
Many types of life insurance policies, like Unit Linked Insurance Plans (ULIPs), combine life insurance protection with wealth creation. They not only provide life insurance coverage but also allow you to invest and increase your money through market-linked or non-market-linked (in the case of endowment plans) routes. In the case of ULIPs, you can earn compounding returns or profits based on the market performance of the underlying assets of these plans.
Leaving a Financial Legacy
A life insurance policy goes beyond being a contingency plan for your spouse and permits you to leave your legal heirs a financial legacy. Heirs are nominees or family members who are directly related to you. In the event of your death, a life insurance policy will provide appropriate financial support to your chosen family members through a death benefit, maturity payout, or systematic returns, whichever is applicable. Whatever the monetary payout, your heirs will live comfortably and achieve their ambitions.
How Can You Get the Most Out of Life Insurance?
Now that we have understood the main advantages of life insurance policies, there are a few strategies to optimize your life insurance plan.
Purchase a Joint Life Insurance Policy
You and your spouse may be eligible for group term life insurance offered by your employer, but purchasing a joint life insurance policy outside of work provides more benefits and features. A joint life insurance policy can combine your and your partner’s benefits and minimise premium rates. However, you should cancel any existing or old separate life insurance policy, or your total premium payments may increase.
Take Advantage of Tax Benefits
Don’t forget to make the most of the tax advantages that come with life insurance. The tax implications of various life insurance plans vary slightly. Still, one tax provision of the Income Tax Act of 1961 applies to all: Section 80C allows you to receive tax deductions on insurance premiums paid up to ₹1,50,000 per year.
Consider ULIPs for Wealth Creation
As previously mentioned, Unit Linked Insurance Plans (ULIPs) offer a unique combination of insurance coverage and investment opportunities. ULIP returns benefit from the power of compounding, and you can invest in them to create a financial corpus that takes care of you and your spouse in achieving long-term goals like funding your child’s education, buying a house, or even supporting yourself during retirement. ULIPs like the Wealth Secure+ by Edelweiss Tokio Life Insurance offer a pool of diverse funds for you to choose from so that you may invest as per your risk tolerance and desired returns.
Regularly Review and Update your Coverage
Life doesn’t stand still, and neither should your insurance coverage. Your insurance needs may also evolve as your life circumstances change – such as having children, buying a home, or experiencing career growth. It’s crucial to regularly revisit and update your life insurance coverage to ensure that it aligns with your current financial situation and goals. This might involve increasing your coverage to accommodate your growing family or adjusting your investment strategy within your ULIP to match your changing risk tolerance.
Planning your insurance needs after marriage is crucial to securing a happy and financially stable future. Life insurance policies make up a financial safety net for your spouse and family, ensuring they are protected in unexpected circumstances. By understanding the reasons for purchasing life insurance, you can create a comprehensive financial plan supporting your family’s needs and aspirations. It’s important to regularly review and update your insurance and investment strategies as part of an ongoing financial planning process to achieve your goals.