Insurance as an Investment

While planning your personal finances, insurance is a must thing to be considered. This is because it helps you to be prepared for the uncertainties that might come your way. But in addition to acting as a reliable financial assistance tool, it is also considered to be an optimal source of investment. How do you ask? Here’s how Insurance as an investment aids you in a plethora of ways:

Top 5 benefits

1. Safety shield for your family’s future

We invest to receive returns that will be beneficial for us and our loved ones in the future. Insurance serves the same purpose but in a better way. Money invested in insurance policies is at extremely low risk and is sure to offer returns. In your absence, your family can utilize this money to make up for the financial loss and maintain a stable, healthy lifestyle.

2. A financially independent retired life

A few insurance policies provide for a fixed monthly, quarterly or yearly income after the premium payment period is over. Investing in such policies can help you to have a happy, secured, and financially independent life after retirement.

3. Tax benefits

Under section 80C of the income tax act, insurance policies are subjected to provide tax benefits. Tax benefits up to Rs. 1.5 lakhs can be availed by an individual. This clears the picture of insurance as an investment as it helps in saving money on taxes.

4. Disciplined and regular investments

A policyholder needs to compulsorily pay the premiums at fixed intervals, as per the frequency opted by him. This helps in maintaining and inculcating a habit of regular investment for a long period of time. Insurance doesn’t just instill discipline but
also makes you plan your expenses in a better way and relieves you of the burden for future savings to some extent.

5. Dealing with financial liabilities

During mishaps, the situations already are too exhausting and stressful. In such times, insurance can relieve you from worrying about financial issues. It can help you cover up for your losses and pay back loans. It helps in preventing any disturbances in your financial plans, avoids draining you of your savings, and assists you in maintaining a healthy lifestyle.

When it comes to choosing the right insurance plan, keeping in mind the investment aspect, ULIPs can be a great choice. This is because they are flexible enough and allow you to smartly invest your money in the right places such as equity shares, debt instruments, and bonds.

ULIPs prove to be an extremely advantageous financial tool as they help the investor in tax saving, ensure regular saving and investments with good returns. Along with investments you can also enjoy the benefits and security of an insurance plan. The investor also does not have to put in much effort in monitoring the market conditions.

This work is done by the investment managers at the company. All the investor has to do is select the kind of investment he wants to make, the rest is taken care of.

As an individual, it is our responsibility to invest and arrange for our family’s well being and safe future. Insurance serves the function of a smart investment, helps us save, and ensures financial security. This makes it an essential part of our monetary and stability planning.