Money lying idle in your bank account is not going to grow by itself and you need to make smart investments so that you can not only safeguard your present, but also your future! While investing in mutual funds, fixed deposits, and real estate is a good idea, investing your hard earned money in insurance can be one of the wisest decisions you will ever take! Most of us tend to believe that bad things happen to others, financial constraints and emergencies are faced by others and life will go on forever! However, such misconceptions cloud our judgment for rational decisions to be taken when facing the uncertainty of life! Therefore it is important to understand why insurance is so important for us.
Let’s bring to you the top most reasons for the same:
Many of us are the sole bread-winners in our family. In case of an unfortunate event of a life-altering accident or untimely death, the dependents have to face the hardship of surviving without having any financial support. However, if there is an investment made in insurance, it provides a buffer against such financial hardships. Not only does it provide a lump-sum amount at the time of death, in case of accidents or any disease leading to hospitalisation, it also helps to take care of the entire medical costs. Also, under certain insurance plans, one gets their income replaced under annuity payments after retirement. All in all, a beneficial deal for the insured as well as for their family members.
2) Perfect Investment
There are a lot of insurance products available in the market offered by various companies. For example insurance plans like whole life plans, pension plans, guaranteed income plan and growth plans are those that offer the insured not only an assured growth in the invested premium amount, but also provide insurance cover against death. This means that if the insured lives till the completion of the policy period, he/she will get an assured growth in the premium amount paid. And in case the insured unfortunately dies before the period is over, his/her nominee would get the complete insurance cover along with other benefits if mentioned in the policy! In other words, while being alive and even after death, insurance is there to help you grow your money and provide healthy returns on your investment, not only to you, but also to your near and dear ones!
After the liberalisation of 90’s, more and more people are living under the burden of loans. While you’re earning and able to pay your monthly instalments, it is all good. However, in the case of an unfortunate death, all that debt becomes responsibility of the dependants and family members. This becomes an extremely delicate situation, especially if there are children and elderly in the family who can’t earn and pay back the debts. In such a scenario, if a substantial amount of insurance cover has been taken, it comes as a real help so that one is freed from the loans repayment and can focus on moving on with life without any financial liabilities. Also, an insurance policy can be kept as collateral in case of taking a home loan. It’s kind of a double benefit. Not only can you buy your dream home, you can also safeguard its loan with your insurance policy in case of any unfortunate event!
4) Tax Benefits
This is one of the most obvious benefits of insurance and most people who buy it are told only about this positive aspect of investing in an insurance policy. As per the income tax rules, an investment in insurance policy can help you get tax rebates under Sec 80C and Sec 80D. This way, not only you get insurance benefits, but you also save money for investing in it that can be used for better purposes!
Therefore it absolutely makes for a brilliant decision to ensure that you invest your money in a range of financial tools, especially insurance as it takes care of your life, while you are alive and even in the unfortunate scenario of your death! This would mean that you value your life as well as the life of your family members who should not face any financial hardships at least in your absence!
The best thing to do right away is to pen down your financial priorities and then search for the best insurance plan that meets your requirements and then go ahead and buy it!
This is the right time, the right moment to take the right decision!