Emergency planning is crucial yet often overlooked while making financial decisions. The primary goal of an emergency or contingency plan is to provide enough and timely financial assistance. A strong plan can help a family to get through financial hardships without risking their long-term interests.
A life insurance policy is a vital contingency tool that provides financial protection to one’s family during an emergency. In the aftermath of a pandemic like COVID-19, when hundreds of thousands of lives were lost, people have grown more concerned about their health and well-being. Life insurance coverage has become more critical than ever. In such exceptional circumstances, an insurance policy can serve as a helping hand at every stage of life.
Why is life insurance essential at every stage of life?
● 18 to 25 years – Single
Many young Indian adults do not consider purchasing a life insurance policy because they assume they are too young to need one. What they fail to realise is that because they are young, healthy and free from responsibilities, they have innumerable opportunities to save.
Unfortunately, many young people live a millennial lifestyle, which often makes them ignorant about the uncertainties of life. They live life on the edge and avoid financial commitments. However, they must be educated about the benefits of saving early and their responsibility as a family member. A young person can get a plan with a larger sum assured at a much cheaper premium than people buying one in their late 30s or early 40s.
● 25 to 30 years – Married Without Kids
At this age, people may have settled into their careers. They have some earnings and as they are young and healthy, they are starting a new life. They are likely to be married and planning a family. Unfortunately, they could fall prey to the lifestyle habits of their single days. There could be social pressure to live up to an expected lifestyle, which results in them spending more frivolously.
Many in this age group live an extravagant lifestyle, spending on a new car, vacations, jewellery, etc. Therefore, insurance can be very useful to help cover loans and liabilities. It can create a second income which can be useful in times of need, especially during unforeseen situations like the pandemic or in a medical emergency.
● 30 to 40 years – Married with Young Children or Expecting a Child
At this point in life, people are starting to take responsibility. They have an opportunity to save, but as the family is growing, so are its needs. Childbirth and preschool can be major costs in a person’s life at this stage.
Insurance becomes even more critical during this stage as a father may have many dependent family expenses or may have to cover loans and liabilities. This is also the time to start thinking about their toddler’s future, as well as their own. Insurance at this stage can help secure higher education, marriage, and other ambitions and protect a child’s future.
● 40 to 50 years – Married with Older Kids
At this stage of life, people have attained financial independence and have had the opportunity to save for the future, including for their children’s education, marriage and retirement. Many might have experienced a job loss or other unforeseen events, which makes them understand uncertainties and the nature of liabilities.
Savings is a necessity at this stage to manage growing family responsibilities. Insurance is therefore a must to protect themselves and their family. It can help buy peace of mind by creating a second income and providing financial aid in case of health emergencies. Insurance at this stage can also help cover loans and liabilities, secure the future of their children and help them plan an encumbrance-free legacy.
● 50 to 60 years – Pre Retirement
At this stage of life, most individuals have fulfilled their commitments to their children, and they have shifted focus to themselves. Many would have already planned for retirement or would be starting to. Insurance at this stage can bring peace of mind. It can create a second income and cover any loans and liabilities. It can also help save tax initially. Additionally, previously invested or saved money can be further reinvested to leave behind a sizable legacy.
● 60 years onwards – Retirement
At this stage, most individuals look forward to benefits from their lifetime savings. They realise the importance of protecting themselves and their spouse against health-related issues and buy insurance for post-retirement income and to plan the legacy of their children and grandchildren. They can also take advantage of maturity benefits to help close loans and liabilities. Insurance can support survival costs and remove the physical and financial dependency.
Life insurance is a way to show one’s family how much they care. It is about following through on commitments and fulfilling the promise of taking care of loved ones forever, shielding them from potential financial instability during uncertain times. As a result, life insurance coverage is essential at all stages of life. By now, we hope you understand why life insurance is essential at every stage of life.