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04 Feb, 2023
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Why is Life Insurance Important for Self-employed Fellows?

Anyone who aspires to be their boss can understand the advantages of working for themselves, but your family’s financial future can be compromised without a life insurance policy. Life insurance plans that cover your loved ones if you die, such as life insurance, are critical for self-employed individuals to consider.

While being your boss provides some liberties, it also entails taking on new duties and losing some benefits you may have overlooked, such as a monthly income scheme.

With no death-in-service benefit, self-employed individuals may consider acquiring life insurance or other types of personal insurance to compensate for the lack of Statutory Sick Pay, maternity leave, and paid vacations.

Top Benefits of Having A Life Insurance

If you are self-employed, you should consider whether you need a life insurance policy and how crucial it is for you based on your specific circumstances. After all, if you are self-employed, you must accept responsibility for your company’s or line of work’s achievements and failures.

Life insurance for self-employed individuals may be quite helpful for a variety of reasons. Life insurance offers a variety of helpful advantages.

Valuable Return Of Investment

Several financial advisers in India recommend that everyone invest in a life insurance policy to offer financial security for your family when you are not there and to get excellent returns on the investment. Many Indian life insurance plans provide a decent recent in the shape of a bonus that no other investing tool does.

In addition, when compared to other investment alternatives, life insurance is a secure financial tool. After the term or following the insured’s death, the money you invested in the insurance is repaid to you in full as the sum guaranteed.

Tax Benefits

One of the major benefits of life insurance is that it gives several tax advantages. If you are a salaried employee and have acquired a life insurance policy, you may be eligible for a deduction under Section 80C. Currently, you may claim a maximum tax deduction of Rs. 1,50,000 under this provision.

Availability Of Loan

In the case of an emergency, when you want money immediately, you can borrow it against your life insurance coverage. Almost all of India’s leading insurance firms now provide policyholders borrowing opportunities. 

Depending on the policy conditions, you can borrow a specific proportion of the insurance’s cash value or the sum insured. Before you sign up for the insurance, double-check the loan policies with the insurer.

Financial Planning Through Different Life Stages

It is critical to plan your funds carefully as you progress through life’s phases. This is when life insurance might come in handy. You may use the benefits of term life insurance to provide financial support to your family in the case of your untimely death.

This would help them meet their financial responsibilities and live a financially independent life without sacrificing their lifestyle.

You may also achieve your different future objectives by investing in a life insurance policy, such as child marriage, paying for your kid’s school, purchasing a dream house, or creating a corpus for post-retirement life. Make certain that you get the appropriate insurance plan for your needs.

Guaranteed Income

Your family is secure because you provide a consistent source of money to meet their requirements. The money you make helps pay off your loan (if you have one), your rent, your daily bills, your child’s schooling, and other household expenditures. Certain life insurance plans payout regularly, which can compensate for the loss of income caused by the death of a family member who works.

Additional Coverage

Many insurance companies in India enable life insurance policyholders to acquire additional coverage and baseline coverage. Riders are the terms used to describe this additional coverage. Riders enable you to expand your coverage and obtain complete coverage against risks that are not covered by the primary scope of your life insurance policy.

Riders may include personal accident coverage, premium payment waivers, critical illness coverage, income loss owing to disability, and so on. The additional coverage may also enable you to receive tax benefits under your life and health insurance policy.

For example, if you choose a critical illness rider, you can deduct the premium under Section 80D of the Indian Income Tax Act.

Business Security

A few life insurance companies in India offer an option where your partner can acquire a share of the policyholder’s after-death policyholder if you have purchased a policy and operate a business.

In this instance, the business partner must sign an agreement with the life insurance company, and the proceeds from the sale of the share will be sent to the designated nominee. However, you should be aware that the policyholder’s dependant or nominee receives no equity in the firm.

Peace Of Mind

Having life insurance gives you complete peace of mind. This is because they know that their family and loved ones would have a financial safety net if they die. We all have some financial obligations, but proper life insurance coverage ensures that your bills or loved ones are financially taken care of in the case of your death.


Riders are optional benefits that can be purchased and added to a standard insurance policy. These alternatives enable you to improve your insurance coverage. Riders cover risks that are not covered by the primary life insurance policy, providing more comprehensive coverage.

Riders may cover critical sickness, personal injury, family income benefit, and premium waiver benefit). These additional policies come in when the primary life insurance policy is not available.

The Bottom Line

Life insurance isn’t only for the rich. No matter what your income level is, life insurance may ensure that your loved ones can make ends meet if you die. And, contrary to popular belief, a life insurance policy may be less expensive than you think.

Life insurance is a must-have. It is a risk-mitigation and protection instrument that must be acquired without hesitation or deliberation. After all, it is a question of a way of life that sustains many people. As a result, recognise the need for life insurance and compel yourself to get it.

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