If you are in your mid-20s and looking to get married to the love of your life, getting life insurance should be your primary goal. Now, you may be thinking about how the two are connected. Well, Most of us have an ideal life that we are out chasing. It begins with education, earning a living, getting financial stability and getting married.
But is getting married so straightforward? Well, not for many. According to an Economic Times article from 2018, an average Indian spends nearly 20% of their entire lifetime wealth on a wedding. Well, if weddings are so expensive, how do we plan for them? Most people end up borrowing some money or liquidating some assets to make ends meet. Isn’t it a tad bit risky?
When your wedding costs may run high and compromise is not a choice that you have, then leveraging loans is the call you may need to take. In times like these, having a life insurance policy is the knight in shining armour that you are waiting for. A life insurance policy acts as collateral to give you access to additional finances. These finances can help you ensure that the wedding of your dreams does not end up drawing a hole in your pockets.
However, the policy should be renewed every year with little to no delays in payments of premiums.
Things to Consider Before Considering Life Insurance For Wedding Plans
Life insurance plans are a cover that provides your beneficiaries with the finances they need to lead their life after your demise. Here is how life insurance can safeguard your wedding plans:
- Let’s understand the amount of loan you can get: The loan amount against your life insurance would be around 80% of the surrender value of the policy. Some insurance companies take into consideration 50% of the total premiums paid to calculate the maximum loan amount.
- Valid proofs to submit: The life insurance policy needs to be signed in favour of the lending company. It would be best to execute the assignment deeds prescribed by the relevant institute.
- Any lending institute or life insurance company will charge a certain processing fee against the loan processed out of your life insurance policy.
Why is this beneficial?
The interest rate against a loan on the life insurance policy is much less than a personal loan, and hence, it makes it affordable.
However, not everything is gold. A key point to note here is that if the interest due on the loan exceeds the surrender value of the policy, then you are at risk of losing the life insurance cover.
Conclusion
A wedding is a once-in-a-lifetime expense, and not having it lavishly can be tricky. Spending a ton on your wedding without it weighing down on your pocket takes work. With a loan on your life insurance, you can ensure you enjoy your wedding however you want. Before getting a loan, ensure you have life insurance and what expenses your marriage will entail.
