While taking important life decisions, it is necessary to think twice or maybe even more to ensure selection of the right path. Often, we make a wrong choice in a hurry. However, it is later realised that such wrong move is taking us towards a wrong direction; same is the case with life insurance policies.
Yes, if you have chosen your life insurance in a hurry, you may find it a waste of money. You may tend to leave it midway disregarding all its benefits. However, there can be negative impacts of such a move on the future claim benefits. So, it is better to spend the time to understand the disadvantages of leaving your life insurance policy midway. Here are few pointers in this regard.
1. There won’t be a financial shield for your family
The first and the foremost disadvantage is staying bereft of the death benefits. When you stop paying the premiums all of a sudden, the policy no longer continues to give you cover. In that case, during your unfortunate demise, emotional as well as financial problems will increase for the surviving family members.
The financial problems will be stronger to disturb their life. Debts, bills, mortgages, funeral expenses and income replacements will start to create a burden for them. If you have given them a luxurious lifestyle, so far, all that will be in ruins.
A policy cover, on the other hand, will help them overcome the financial struggle with the beneficiary receiving the death benefit.
2. You will not receive the tax benefits
Insurance policies generally fall under income tax saving schemes. This means that when you are taking such policies your benefits are double- ‘policy benefits as well as tax- benefits’. Even dividends and cash value accumulated can help to save your taxes. Leaving the policy midway can cost you more considering the taxes charged as per the income tax slabs.
3. You cannot take advantage of affordable prices
With insurance in place, you not only benefit from the income tax saving schemes but also from their reasonable prices. Especially, if you are choosing term insurance, the benefits are more. A deal that you have once received at an affordable cost might not continue to provide similar benefits in the long run (as premiums increase with increasing age). So, leaving midway, you would definitely commit a mistake.
4. You will be left worrying about your family’s security
By continuing with your existing insurance plans, you can be totally without any worries. In case your unfortunate demise or if you are unable to continue work because of an accident or sudden disease, your family will receive the benefits. If you are leaving it in haste, the cons would never leave your side. You will have to continue worrying about what might happen to your family and who is going to take care of their needs in your absence.
If you are closing your insurance policies now, you are surely going to lose a lot. You are allowing yourself and most importantly your loved ones to remain unprotected from unforeseen unfortunate events.
How can an insurance policy help you?
In an unfortunate event of your accident, your family would be the one to suffer the most, both emotionally and financially. Especially, if you are the single earning member of your family and have small kids then think of the hassles they would have to face.
A good life insurance policy will help your family keep up the current standard of living even in your absence. While they still would be under an emotional strife, they can at least fight financial issues with a proper insurance plan in place.