8 Reasons NOT TO BUY Life Insurance Policy
When not to buy life insurance
The main objective of buying life insurance is continual source of income when the breadwinner of the family dies, so that the money received can be used to cover day to day expenses, paying off debts, children’s education etc. i.e. your family’s future becomes little hassle free and preventing them from devastating effects. But following are few reasons when you should not buy life insurance policy:
- Multiple and sufficient earning members in a family: If there is more than one earning member in your family and each one of them has accumulated enough wealth for their future, then in such case you don’t need to buy a life insurance. In such cases, putting money in high ROI investments is the best alternative.
- Agent is a known person: Most of the people buy life insurance emotionally because the agent is their near friend/relative. If such is a scenario, then ask for other alternatives such as any other investment plans or else practise for saying NO because these days in a networked world, every person has some friend/relative who is an insurance agent.
- When you want to save tax: Main objective of people buying a life insurance product is tax saving under the section 80C of income tax act. However not many of them are aware of other high yield investments option better than life insurance. May be because of lack of financial knowledge or your financial advisor never revealed this to you. So before buying any insurance policy make sure you plan out your financial goal and then buy a investment/insurance plan accordingly.
- No Beneficiaries: If a person is single and no dependants at all, then there is no need to buy the policy.
- Extremely high premiums: Persons buying life insurance during their old age should be very cautious because premiums would be very high and instead they should select between medical and life insurance. If you’re old and your child is very young then may be you can ask your child to buy the policy and put you under nominee.
- No steady source of income: Never buy life insurance post retirement. Because apart from high premiums, you’ll have to depend on your children to pay for the premiums provided you have no assets.
- No financial liabilities: If you feel that you’ve sufficient savings for the rest of the future i.e. no home/car loan, have enough assets, your children are self dependent then no need to buy life insurance.
- Guaranteed Returns: Most often agents/financial advisor try to convince you by assuring guaranteed returns. But be careful, because in such cases agents would never disclose about other investment options giving higher returns since their target is to sell policy.