Whenever you think of the term insurance, the first thing that comes to your mind is protection. The insurance industry has evolved pretty quickly from insuring life to goods and services, and now there are companies that re-insure the insurance companies. Insurance is basically the promise of being compensated by a company in case of death, damage, loss, illness or theft in return for the monthly premium you pay. At present anything and everything is being insured by insurance companies.
The different types of insurance policy in India are endowment policy, term insurance, whole life insurance, children policy and annuity plans. People in India are getting more and more familiar with insurance and are using it for multiple reasons. The first and foremost part of insurance is that it is a protection against uncertainty, but many people are also using it as an investment.
The sole purpose of insurance is to cover your/ your family’s expenses in case of any mishap. There are different types of insurance policies that give you economic protection and also cover your risks in case you meet with an accident. Insurance policy covers your expenses and also encourages you to save money. Moreover, it gives you a sense of comfort and eliminates dependency. The most common insurance policy among Indians is life insurance which is further classified into whole life insurance and term insurance. Contrary to this some people also use insurance as an investment. Most people usually are unaware of how insurance can be used as an investment. Mention below is some of the points of how insurance can be used as an investment:
• Insurance gives a you a tax deferred growth that is you don’t have to pay any taxes on the interest, dividends and capital gains from the insurance until you withdraw the proceeds.
• There is no fixed term on life insurance which means you can keep it as long as you want and keep on getting earnings as long as you want.
• Insurance policy can also be used as collateral in buying a property on seeking a loan. This gives added advantage to policy holders as they not only earn from it but also use it as fluctuating capital.
There is always a debate when it comes to using insurance policy as an investment or protection.
Taking all the above points into consideration, it is always beneficial to use insurance as a protection as by disturbing the insurance amount and premium may lead to early expiration and also deprive you of some of the benefits that you have.
The different types of insurance policy in India are endowment policy, term insurance, whole life insurance, children policy and annuity plans. People in India are getting more and more familiar with insurance and are using it for multiple reasons. The first and foremost part of insurance is that it is a protection against uncertainty, but many people are also using it as an investment.
The sole purpose of insurance is to cover your/ your family’s expenses in case of any mishap. There are different types of insurance policies that give you economic protection and also cover your risks in case you meet with an accident. Insurance policy covers your expenses and also encourages you to save money. Moreover, it gives you a sense of comfort and eliminates dependency. The most common insurance policy among Indians is life insurance which is further classified into whole life insurance and term insurance. Contrary to this some people also use insurance as an investment. Most people usually are unaware of how insurance can be used as an investment. Mention below is some of the points of how insurance can be used as an investment:
• Insurance gives a you a tax deferred growth that is you don’t have to pay any taxes on the interest, dividends and capital gains from the insurance until you withdraw the proceeds.
• There is no fixed term on life insurance which means you can keep it as long as you want and keep on getting earnings as long as you want.
• Insurance policy can also be used as collateral in buying a property on seeking a loan. This gives added advantage to policy holders as they not only earn from it but also use it as fluctuating capital.
There is always a debate when it comes to using insurance policy as an investment or protection.
Taking all the above points into consideration, it is always beneficial to use insurance as a protection as by disturbing the insurance amount and premium may lead to early expiration and also deprive you of some of the benefits that you have.
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