Life Insurance to cover your debts

 Life Insurance to cover your debts

• by Dinesh Randive

It is a shocking fact that only around 10 percent of the Indians have life insurance. Most people often think that buying a life insurance is a choice and that they can think about it when they are nearing their retirement. But, that is totally a wrong assumption. Buying the right life insurance cover is one of the most vital financial decisions that one has to make as soon as they start earning. Why is having a life insurance cover so important? Well, irrespective of how much one earns, the future is unpredictable for anyone. People can die young or old, healthy or by illness, natural or accidental death. So, if you are the sole earning member in the family then your demise could have overwhelming consequences on your family and loved ones. They might not be in a position to handle day to day household expenses, pay off the existing debts and also uphold the current standard of living.

Of all things, dealing with outstanding death is the most difficult one as there is no choice or compromise that could be made in this. No one would want for their family to deal with this kind of financial obligations during a disaster. With the right life insurance cover, you can cover any kind unpaid debts such as a personal loan, a home loan, any vehicle loan, or credit card outstanding balance.

A right life insurance policy will guarantee that all your outstanding debts will be paid if you happen to have any debt that you were still paying at the time of your demise. Nobody would want to hold their family and loved ones in the position where they are left to deal with the financial responsibilities that they left behind. A good and right value life insurance will safeguard that such a day will never come. Be it a personal loan, property loan, a credit loan or any other type of loan, the life insurance policies that you have will help your family to repay all those debts.

The right amount of life insurance cover and the right type of insurance policy that one needs depends upon that individual’s commitments and requirements. Some might need a lump sum amount that would just help his/ her family to maintain their standard of living and to manage daily household expenses. Others might need a lump sum amount to cover existing debts/ mortgages apart from managing daily expenses. Some people might need money to cover their kids’ education and marriage expenses and so on.  But above all, it is very important to make sure that the insurance policy that you buy covers all your outstanding debts apart from covering daily expenses of your family. The total amount of unpaid debts should be the most important aspect that will decide the amount of life insurance cover one needs to buy. Handling the pressure from debt collectors will be the most difficult situation for the family to face during the loss of their loved one. For example, if one has some outstanding debts that total to 30 lakhs, then he/ she should make sure to buy a life insurance policy that will be at least 60 lakhs. This will help the family to pay off the debts and also have a lump sum to take care of household expenses.

Why wait? Contact your insurance agent today to know exactly the right life insurance cover that you will need to take care of all your debts and also to provide a peaceful and appropriate standard of living for your loved ones even after your demise.