Life insurance is perceived wrong as an investment option. But it is neither a saving nor an investment; rather, it’s a hedge or security against unforeseen risks. If you want to use insurance as an investment option, then you are going wrong somewhere, as the primary objective of Insurance is to protect the investor from unforeseen loss. So you need to know the insurance facts.
Myths And Facts About Insurance That You May Not Know
If you call yourself educated, then you should be informed and updated about many things, especially money matters. But surprisingly, you are unaware of many hidden insurance interesting facts, which you will learn from the following listings.
1] It Is Cost-Effective When Younger.
A fun fact about insurance is Start buying insurance as soon as you start earning. Life insurance coverage is cheaper for a younger individual and its coverage becomes costlier as the individual starts aging. After a certain age like 85 plus in India life cover is not available except for a few who provide till 99years of age.
2] Certain Riders Available.
Insurance plans are flexible nowadays. You must know that it has riders to add on to customize your insurance plan according to your needs. There are many riders like accelerated death benefits, waiver of premium, return of premium riders, child term, etc, with added costs to get extra benefits in the long term.
3] It Is Convertible
Here is yet another fun fact about insurance. Some Insurance covers are convertible. For, say, some term insurance cover can be converted into whole life cover with the extended benefit for life. Another example is motorcycle insurance coverage, which can be converted into a rider’s motorcycle cover, which allows any person authorized by the insured to ride the motorbike and reap the insurance benefits.
4] It Is Essential For Tax Benefits
Know this insurance fact: You can claim tax deductions under 80 C and in the case of health insurance. In the case of health insurance, certain deductions can be claimed under section 80 D. After the demise of th policyholder, the sum assured is free from taxation. So, if you are a taxpayer, the insurance policy will help you claim tax benefits.
5] Stabilise Your Portfolio
Your financial portfolio is filled with many instrument options like fixed deposits, bonds, shares, debt funds, etc, which is not enough if you do not have an insurance plan. As an insurance plan is the future protector with a huge corpus of money, a person can claim after death or accident. It is a tax-saving option and must be added to your financial portfolio to provide stability.
6] Choosing An Endowment Plan Over Term Policy
A must-to-know insurance fact. The insurance agent may allure you with various endowment schemes of higher returns in the future, but an insurance plan should be taken for the very purpose of insurance coverage during unforeseen events. So, term insurance is the most crucial part of the insurance portfolio. If you want your money to grow, then buy any investment plan, but if you want to avoid unforeseen events like death, fire, calamity, or accident, then term insurance should be taken.
7] It Is Affordable
The greatest myth about insurance is that it is unnecessarily costly. Insurance covers are long-term, so the premium amount is distributed in smaller amounts, which is affordable and not at all costly.it is budget-friendly. With a small contribution every year, we can protect ourselves from a huge loss that may or may not happen in the future.
Concluding Insurance facts
The life insurance sector is a new boon in the financial market. Nowadays, it is mandatory to add an insurance plan to your finance portfolio. Here the major insurance fact to know is that whether you are a service person or business person you need to have insurance to insure your business,goods,your health or your family.
