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5 reasons why life insurance is a smart investment for a secure future

January 18, 2017 09:30 IST

It’s never too early to buy a life insurance policy. Contrary to popular belief, it is one of the smartest investment decisions you can make to secure your family’s future

Life insurance may not be a priority for many of us, but when it comes to saving taxes that’s our go-to strategy. Saving taxes is critical to financial planning, but maximizing your tax savings shouldn’t be done at the cost of making smart investment choices.Yes, tax deduction under Section 80C of the Income Tax Actis an important benefit of life insurance, but that’s not the only reason why you need to buy a life cover.

A life insurance policy can be an ideal blend of risk cover, returns and tax benefits. The primary function of life insurance is to protect the insured from unexpected losses such as sudden death or liability.Buying a life cover is one of the most important decisions you can make because by investing in the right life cover you’re buying your family a strong financial future.

Here are five reasons why life insurance is a smart investment choice for you and your family:

1. Income replacement
This is the basic benefit any life cover provides. Life insurance protects your family in case of any eventuality. Term insurance is the cheapest form of life cover you can buy to secure your family’s financial future.The money known as the death benefit is paid to the policy holder’s family if he/she expires within the term of the policy.

Term plans from insurers like HDFC Life are a great offering because they’re both inexpensive and reliable. Even if you’re approaching retirement, you have access to retirement plans from insurers that offer income replacement in the form of annuity pay-outs post-retirement.

2. Investment benefit
A term plan is not the only life cover out there. You have plenty of options such aswhole life plans, Unit Linked Insurance Plans(ULIP), endowment or money-back policies and more.These plans promise you a maturity benefit along with comprehensive protection.While a term plan offers pure life cover, the others are a mix of life cover and savings.

For example, in a whole life plan the policy holder is covered till death or on reaching 100 years of age. If the insured individual lives beyond the age of 100, he/she receives a maturity benefit and in the case of any unfortunate event, his/her nominees receive the death benefit. If you hold a whole life insurance policy you are eligible for dividends or cash value that’s accumulated throughout the life of the policy. ULIP is a great tool for ensuring forced savings. It’s a combination product that allows you to enjoy the benefits of tax savings, high returns and life cover with minimum risk.

3. Loan protection
The right life cover relieves your family from dealing with any kind of debt during a crisis. For example, any credit card loan, personal loan, auto loan or home loan will be taken care. If you opt for the right amount of sum assured,your family does not need to worry about your pending debts when you’re no longer around to take care of them.

4. Saving taxes
This is probably the most important reason why we all think of buying a life insurance policy.If you’re a salaried individual, you understand the trouble one has to undergo to plan his/her tax savings. Regardless of which life cover you buy, your insurance premiums can be claimed as a tax deduction on your gross total income at the time of filing taxes under Section 80C of the Income Tax Act, 1961. The best way to maximize your returns when you buy a life cover is to align your financial goals with your tax planning strategy.

5. Wave your worries goodbye
One of our biggest concerns is what will happen to our loved ones when we pass away. Who will be there to take care of them and protect them?When you buy a life cover you wave your worries goodbye because your family will be financially protected. The right policy gives you peace of mind.And this is a benefit you can’t ignore.

Purchasing a life insurance policy is crucial, but planning is the key for you to reap its benefits. You can’t buy life cover with a one-size-fits-all approach. You need to identify your own individual life insurance needs before you can pick the right policy. Generally it’s advised to have a life cover which is 10-15 times your current earnings. You can now make your cover more comprehensive by adding Critical Illness and Accidental benefit add ons depending on your requirement. HDFC Life offers plans that are affordable and can be easily customized to suit your requirements. However once you have a life cover, you will need to revisit it at all major life events where your responsibility and liability increases.  

Life insurance is a great financial investment, but you need to understand all the offerings before opting for a particular policy so that your family can live the life you’ve worked so hard to give them.

 

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5 reasons why life insurance is a smart investment for a secure future

It’s never too early to buy a life insurance policy. Contrary to popular belief, it is one of the smartest investment decisions you can make to secure your family’s future

Life insurance may not be a priority for many of us, but when it comes to saving taxes that’s our go-to strategy. Saving taxes is critical to financial planning, but maximizing your tax savings shouldn’t be done at the cost of making smart investment choices.Yes, tax deduction under Section 80C of the Income Tax Actis an important benefit of life insurance, but that’s not the only reason why you need to buy a life cover.

A life insurance policy can be an ideal blend of risk cover, returns and tax benefits. The primary function of life insurance is to protect the insured from unexpected losses such as sudden death or liability.Buying a life cover is one of the most important decisions you can make because by investing in the right life cover you’re buying your family a strong financial future.

Here are five reasons why life insurance is a smart investment choice for you and your family:

1. Income replacement
This is the basic benefit any life cover provides. Life insurance protects your family in case of any eventuality. Term insurance is the cheapest form of life cover you can buy to secure your family’s financial future.The money known as the death benefit is paid to the policy holder’s family if he/she expires within the term of the policy.

Term plans from insurers like HDFC Life are a great offering because they’re both inexpensive and reliable. Even if you’re approaching retirement, you have access to retirement plans from insurers that offer income replacement in the form of annuity pay-outs post-retirement.

2. Investment benefit
A term plan is not the only life cover out there. You have plenty of options such aswhole life plans, Unit Linked Insurance Plans(ULIP), endowment or money-back policies and more.These plans promise you a maturity benefit along with comprehensive protection.While a term plan offers pure life cover, the others are a mix of life cover and savings.

For example, in a whole life plan the policy holder is covered till death or on reaching 100 years of age. If the insured individual lives beyond the age of 100, he/she receives a maturity benefit and in the case of any unfortunate event, his/her nominees receive the death benefit. If you hold a whole life insurance policy you are eligible for dividends or cash value that’s accumulated throughout the life of the policy. ULIP is a great tool for ensuring forced savings. It’s a combination product that allows you to enjoy the benefits of tax savings, high returns and life cover with minimum risk.

3. Loan protection
The right life cover relieves your family from dealing with any kind of debt during a crisis. For example, any credit card loan, personal loan, auto loan or home loan will be taken care. If you opt for the right amount of sum assured,your family does not need to worry about your pending debts when you’re no longer around to take care of them.

4. Saving taxes
This is probably the most important reason why we all think of buying a life insurance policy.If you’re a salaried individual, you understand the trouble one has to undergo to plan his/her tax savings. Regardless of which life cover you buy, your insurance premiums can be claimed as a tax deduction on your gross total income at the time of filing taxes under Section 80C of the Income Tax Act, 1961. The best way to maximize your returns when you buy a life cover is to align your financial goals with your tax planning strategy.

5. Wave your worries goodbye
One of our biggest concerns is what will happen to our loved ones when we pass away. Who will be there to take care of them and protect them?When you buy a life cover you wave your worries goodbye because your family will be financially protected. The right policy gives you peace of mind.And this is a benefit you can’t ignore.

Purchasing a life insurance policy is crucial, but planning is the key for you to reap its benefits. You can’t buy life cover with a one-size-fits-all approach. You need to identify your own individual life insurance needs before you can pick the right policy. Generally it’s advised to have a life cover which is 10-15 times your current earnings. You can now make your cover more comprehensive by adding Critical Illness and Accidental benefit add ons depending on your requirement. HDFC Life offers plans that are affordable and can be easily customized to suit your requirements. However once you have a life cover, you will need to revisit it at all major life events where your responsibility and liability increases.  

Life insurance is a great financial investment, but you need to understand all the offerings before opting for a particular policy so that your family can live the life you’ve worked so hard to give them.

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