The importance of life insurance in modern times can never be emphasized enough. Life Insurance is the primary financial safeguard against the unexpected demise of the policyholder. Life insurance also functions as a good investment plan, which could, in turn, help you achieve many of your life goals. Indian markets have witnessed steady sectoral growth of Life insurance as more people realize its necessity, especially in recent years.
People are now proactively investing in Life insurance plans. The life insurance industry in India is to grow at a pace of 10.3% annually till 2026, i.e. from Rs 7.0 Trillion in 2021 to Rs 1.4 Trillion in 2026. Even with one of the highest populations in the world, India only accounts for about 1.5% of the total global insurance premiums. This leaves a large population of India uncovered.
Points to consider before investing in an Insurance plan
1. The sooner you invest, the cheaper your insurance plan
Life insurance plans get incredibly cheaper when you invest in them young. You should plan out your insurance coverage even when you do not have any dependents. The younger and healthier you are, The more insurable you’re likely to be.
2. Higher Tax Savings
Insurance policies also come with tax savings benefits. The premium you pay on your insurance is eligible for tax deductions up to Rs 1.5 Lakh as per section 80C. Proceeds get tax-free in case of maturity or death under section 10(D) of the Income Tax Act 1961
3. You may not be eligible for insurance later in the future.
Life is anything but certain; you may not always stay healthy or be in the best of health throughout. If you fall ill, you may not be able to purchase life insurance coverage. Hence it is essential to get insured before any health deterioration may happen.
4. It Supplements Retirement Goals
One primary retirement goal is to have a healthy retirement corpus, which could easily cover your post-retirement expenses. Luckily, with the right investment plan, you can create a regular income stream and earnings every month in the future. This way, life insurance plans also supplement your retirement goals.
5. Re-allocate based on market movements
ULIPs or Unit Linked Insurance Plans allow you to reallocate your funds between different asset classes. When markets are down, you can move your allocations to debt funds, reducing the losses, and when markets recover, you can easily switch back to equities and have your profits surge. You can also switch to better-performing funds. You can easily earn some staggering profits with the right amount of patience and continuous investing throughout your policy tenure.
6. Peace of Mind
Death is an inevitable truth of life. We continuously worry about taking care of our loved ones. Your family will always depend on you throughout your life, also when you’re not there. A good investment plan helps you keep this worry at bay. Your insurance investment will take care of your family when you’re not there; from paying for your children’s education to financially securing your spouse, your investment will take care of everything.
Investing in life insurance is not to be taken as a burden but to be understood as a necessity and a responsibility to safeguard you and your family from unforeseen risks to ensure better peace of mind.
As discussed, Life insurance carries a lot of benefits. Not only does it safeguard your family against economic challenges, but it also reduces your tax burden and helps you achieve financial stability. Even though it is not a direct investment product, it is an essential tool and must be included in your portfolio.
We at Rurash understand the intricacies of not just insurance but also factors affecting your needs and your future requirements. We have a team of experts who will be happy to assist you in selecting the best possible insurance plans for you.