Importance of Life Insurance & Why Do You Need it? | ICICI Prulife (2024)

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View Send Check Why Do You Need Life Insurance? 1. Secure your family's financial future 2. Accomplish your financial goals 3. Brings peace of mind 4. Save tax Reasons to Have a Life Insurance Plan 1. Long term financial goal 2. Protect the child's future 3. Loans and liabilities 4. Child’s education planning 5. Dependent spouse 6. Leave a tax free legacy 7. Retirement planning People like you also read... FAQs

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Why Do You Need Life Insurance?

1. Secure your family's financial future

Life insurance is all about securing you and your family financially. All parents want their children to be taken care of even when they are not around. Life insurance makes sure your loved ones won't suffer financially in your absence.

2. Accomplish your financial goals

We all have some goals in life, for which money needs to be saved. Life insurance plans help you achieve those goals by helping you build a financial corpus with the protection of a life cover. Life insurance plans inculcate a habit of disciplined saving. Paying a little amount as an insurance premium each month will help you accumulate funds. What's even better is that this small monthly amount only keeps growing. So years from now, you'll have enough wealth accumulated to accomplish your more substantial and long-term financial goals.

3. Brings peace of mind

Having life insurance will give you peace of mind. Life is uncertain, and life insurance can offer financial assistance to your family when you are no longer around. You can also plan your retirement by taking a retirement plan where you will receive a monthly income.

4. Save tax

Generally, you can claim an income tax deduction on your life insurance premiums under Section 80Cof the Income Tax Act, 1961**. Pay-outs for death claims are tax-free under Section 10(10D) of the Income Tax Act, 1961**.

Reasons to Have a Life Insurance Plan

1. Long term financial goal

Lifeinsurance plans help you create a substantial financial corpus for your long term financial goals by helping save money with the protection of life cover.

2. Protect the child's future

Every parent wants to provide their child with the best possible future. Life insurance plans ensure your child to have the best possible future even when you are not around.

3. Loans and liabilities

If you have bought a loan then you should always consider buying a term plan. It makes sure that the burden of your loan doesn’t fall up on your dependents in your absence. Term insurance plans are the most affordable way to protect home loan amount and safeguard the shelter of policyholder's family in case of his/ her untimely death.

4. Child’s education planning

Child education plans help you save and build a financial corpus for your child’s future education expenses. These plans provide life cover so that the child gets the sum assured even in the case of policyholder’s untimely demise.

5. Dependent spouse

If your spouse is financially dependent on you, then you must buy a life insurance plan.This will ensure that so that your spouse lives a financially independent life in case of your absence.

6. Leave a tax free legacy

As life insurance pay-outs are tax-free under Section 10(10D) ** of the Income Tax Act, 1961, you can leave a tax free legacy for your loved ones.

7. Retirement planning

Life insurance plans help you invest and build a financial corpus for your retirement so that you can live your post-retirement life comfortably

  • FAQs

✅ Why is life insurance important?

Life insurance is important because it provides financial security to the family in case of the unfortunate death of the policyholder. Life insurance can enable the family of the policyholder to stay financially independent so that they do not have to compromise their lifestyle.

✅Should you buy life insurance only for the tax** benefit option?

Section 80C** of the Income Tax Act, 1961 offers deductions up to ₹1.5 lakh paid towards your life insurance premiums. Thus, life insurance acts as a valuable tax-saving tool.

But you should not buy life insurance only for the tax** benefit. Your investments must match your long-term life goals, such as children's higher education and financial freedom in retirement. Also, you need to secure your loved ones with sufficient insurance cover to overcome the uncertainties of life.

ICICI Prudential Life offers a wide range of pure protection, savings, wealth creation, and retirement income plans. You should assess your financial needs and buy a policy best suited to your goals.

✅ Which type of life insurance should you buy based on life stages?

When you start earning: Buying life insurance early in life can help you get a substantial cover at comparatively lower premiums. You are also likely to have fewer financial obligations at this stage. Thus, you can choose to profit from investments in the capital market with unit-linked insurance plans (ULIPs). In addition to this, you can also consider protecting your income from unforeseen disabilities or critical ailments. A term insurance plan with a critical illness rider or a permanent disability rider can be ideal at this stage.

After marriage and children: With increasing liabilities, the need for a higher cover amount also increases. The ICICI Pru iProtect Smart Term Plan lets you enhance your life cover` at key events of your life* like marriage and the birth or adoption of up to two children. The enhanced cover safeguards your family's financial future in case of any unfortunate event.

Moreover, if you need to start planning for life goals, such as buying property or saving for your children's higher education, you can consider savings and investment-based life insurance plans like ULIPs or endowment plans to earn sufficient returns for your needs.

Approaching retirement: You can purchase a retirement plan to save and earn high returns to support your expenses in retirement. Retirement plans offer great features that can secure your loved ones and offer you a steady flow of income in your non-working years. You can also buy an annuity plan that can provide you with a guaranteed income to help you maintain your preferred lifestyle in your retirement years.

✅ Can you have life insurance for a specific tenure?

You can choose a specific tenure for your term life insurance plan and stay protected for a defined period, such as the repayment tenure of a loan or the years until your retirement. For instance, ICICI Pru iProtect Smart Term Plan offers coverage up to 99 years under the whole life insurance option.

✅ How much time does it take to get a life insurance death benefit claim?

We need relevant documents as evidence for the claim's validity. We might also carry out investigations in case of any discrepancies.

However, ICICI Prudential Life's Claim Settlement Ratio for FY2024 is 99.17%^ as per the annual report 2023-24. It reflects our commitment to honouring our liabilities to our policyholders and our claim handling efficiency. Our average claim settlement duration is 1.5 days< after receiving all claim documents and when no enquiries are necessary.

✅ Why is life insurance important?

Life insurance is important because it provides financial security to the family in case of the unfortunate death of the policyholder. Life insurance can enable the family of the policyholder to stay financially independent so that they do not have to compromise their lifestyle.

✅Should you buy life insurance only for the tax** benefit option?

Section 80C** of the Income Tax Act, 1961 offers deductions up to ₹1.5 lakh paid towards your life insurance premiums. Thus, life insurance acts as a valuable tax-saving tool.

But you should not buy life insurance only for the tax** benefit. Your investments must match your long-term life goals, such as children's higher education and financial freedom in retirement. Also, you need to secure your loved ones with sufficient insurance cover to overcome the uncertainties of life.

ICICI Prudential Life offers a wide range of pure protection, savings, wealth creation, and retirement income plans. You should assess your financial needs and buy a policy best suited to your goals.

✅ Which type of life insurance should you buy based on life stages?

When you start earning: Buying life insurance early in life can help you get a substantial cover at comparatively lower premiums. You are also likely to have fewer financial obligations at this stage. Thus, you can choose to profit from investments in the capital market with unit-linked insurance plans (ULIPs). In addition to this, you can also consider protecting your income from unforeseen disabilities or critical ailments. A term insurance plan with a critical illness rider or a permanent disability rider can be ideal at this stage.

After marriage and children: With increasing liabilities, the need for a higher cover amount also increases. The ICICI Pru iProtect Smart Term Plan lets you enhance your life cover` at key events of your life* like marriage and the birth or adoption of up to two children. The enhanced cover safeguards your family's financial future in case of any unfortunate event.

Moreover, if you need to start planning for life goals, such as buying property or saving for your children's higher education, you can consider savings and investment-based life insurance plans like ULIPs or endowment plans to earn sufficient returns for your needs.

Approaching retirement: You can purchase a retirement plan to save and earn high returns to support your expenses in retirement. Retirement plans offer great features that can secure your loved ones and offer you a steady flow of income in your non-working years. You can also buy an annuity plan that can provide you with a guaranteed income to help you maintain your preferred lifestyle in your retirement years.

✅ Can you have life insurance for a specific tenure?

You can choose a specific tenure for your term life insurance plan and stay protected for a defined period, such as the repayment tenure of a loan or the years until your retirement. For instance, ICICI Pru iProtect Smart Term Plan offers coverage up to 99 years under the whole life insurance option.

✅ How much time does it take to get a life insurance death benefit claim?

We need relevant documents as evidence for the claim's validity. We might also carry out investigations in case of any discrepancies.

However, ICICI Prudential Life's Claim Settlement Ratio for FY2024 is 99.17%^ as per the annual report 2023-24. It reflects our commitment to honouring our liabilities to our policyholders and our claim handling efficiency. Our average claim settlement duration is 1.5 days< after receiving all claim documents and when no enquiries are necessary.

ADVT: W/II/0028/2022-23

COMP/DOC/Nov/2022/711/1435

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Disclaimer

** Tax benefits subject to conditions under Section 80C, 80D,10(10D), 115BAC and other provisions of the Income Tax Act,1961. Good and Service tax and Cesses, if any will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on above.

^Claim settlement ratio is for Financial Year FY2023-24 and is computed on individual basis claims settled over total individual claims for the financial year. For details, refer to
Source: https://www.iciciprulife.com/about-us/investor-relations/yearly-public-disclosures.html?ID=about3

` Life cover is the benefit payable on the death of the Life Assured during the policy term.

< Average turnaround time for non-investigated retail death claims from receipt of last requirement as per Annual report for FY2022.

* ICICI Pru iProtect Smart offers the flexibility to increase the level of protection at key life stages of marriage and child birth, without any medicals as below.

EventAdditional Death Benefit (percentage of original Death Benefit)Maximum additional Death Benefit allowed
Marriage50%₹ 50,00,000
Birth / Legal adoption of 1st child25%₹ 25,00,000
Birth / Legal adoption of 2nd child25%₹ 25,00,000

Additional premium will be calculated based on the increased Sum Assured and outstanding policy term as per your age at the time of each such increase.

ICICI Pru iProtect Smart UIN (A Non-Linked Non-Par Life Individual pure risk premium product)

COMP/DOC/Feb/2020/62/3207

ADVT: W/II/0216/2024-25

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Importance of Life Insurance & Why Do You Need it? | ICICI Prulife (2024)

FAQs

Importance of Life Insurance & Why Do You Need it? | ICICI Prulife? ›

All of us have some financial liabilities, but an adequate life insurance cover ensures that your debts or loved ones will be financially taken care of in the event of your death. Wealth Creation - Some life insurance plans also offer you the opportunity to create wealth.

Read On ›
What is life insurance Why is it important and how much do you need? ›

You want a death benefit amount that will provide funds to cover the items your family will need money for. For instance, if you want life insurance to replace your income if you were to die, you need a policy with a much higher death benefit than if you want a policy to simply pay for your final expenses and burial.

Discover More Details ›
Why life insurance is important in our life? ›

Buying life insurance protects your spouse and children from the potentially devastating financial losses that could result if something happened to you. It provides financial security, helps to pay off debts, helps to pay living expenses, and helps to pay any medical or final expenses.

Continue Reading ›
Why is life insurance important in the Philippines? ›

In the event of your untimely death, your loved ones will receive a lump sum benefit that they can use to cover their living expenses, such as the mortgage, utility bills, groceries, and other daily needs. This benefit can help your family maintain their quality of life even when you're no longer around.

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What was the purpose of life insurance? ›

Life insurance benefits can help replace your income if you pass away. This means your beneficiaries could use the money to help cover essential expenses, such as paying a mortgage or college tuition for your children. It can also be used to pay off debt, such as credit card bills or an outstanding car loan.

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What is the most important thing in life insurance? ›

The main benefit of adding life insurance to your financial plan is that if you pass away, your heirs receive a lump sum, tax-free payout from the policy. They can use this money to pay your final expenses and to replace your income.

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What is life insurance in simple words? ›

Life Insurance can be defined as a contract between an insurance policy holder and an insurance company, where the insurer promises to pay a sum of money in exchange for a premium, upon the death of an insured person or after a set period.

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Is it a good idea to have life insurance? ›

It can also help cover large debts, like a mortgage or student loans, rather than leaving your family responsible after you die. Plus, life insurance pays off with valuable peace of mind. When you take out a life insurance policy, you'll know that your loved ones won't have added financial stress if you pass away.

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Why having insurance is important and its role in daily life? ›

Insurance is an important financial tool. It can help you live life with fewer worries knowing you'll receive financial assistance after a disaster or accident, helping you recover faster.

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Which of the following are benefits of life insurance? ›

The many benefits of having life insurance
  • Income replacement for years of lost salary.
  • Paying off your home mortgage.
  • Paying off other debts, such as car loans, credit cards, and student loans.
  • Providing funds for your kids' college education.
  • Helping with other obligations, such as care for aging parents.

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What are the key benefits of insurance? ›

Financial Stability: Relevant insurance policies guarantee financial stability for a policyholder — monies that could have been expended by a policyholder due to loss is taken care of by the insurer. 3. Provision of Economic Protection: It protects you against unexpected losses that can affect your finances.

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Why do you need to put money in life insurance? ›

In addition to providing a safety net for your family's future needs, investing in a life insurance plan could offer tax advantages and asset protection.

See Details ›
What does life insurance not cover? ›

Life insurance covers death due to natural causes, illness, and accidents. However, the insurance company can deny paying out your death benefit in certain circ*mstances, such as if you lie on your application, engage in risky behaviors, or fail to pay your premiums.

Get More Info Here ›
How much do you really need for life insurance? ›

Another way to calculate the amount of life insurance needed is to multiply your annual salary by the number of years left until retirement. For example, if a 40-year-old currently makes $20,000 a year, they will need $500,000 (25 years × $20,000) in life insurance to reach age 65.

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How much does life insurance cost? ›

Average life insurance cost by state
StateAverage Annual Life Insurance PremiumAverage Monthly Premium
California$668$56
Colorado$645$54
Connecticut$724$60
Delaware$657$55
47 more rows
3 days ago

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