Why do we need insurance, top 5 reasons:
1. Insurance acts as a financial back-up at the time of emergency
None of us what the future holds. Unexpected emergencies such as injury, accidents, illness, and even death can leave you and your family facing tremendous emotional strain. Insurance plans help you emotionally and financially so that you can focus on rebuilding your life.
2. Insurance makes retirement secure
A retirement policy is a type of insurance plan that helps you to save part of your income over a long-term period and makes you financially secure post-retirement. The accumulated income will be given back to the insured person as a pension.
3. Insurance helps in securing future
Your present life might be stable with a steady income flow that meets your and the family’s needs. But life is uncertain. Some unforeseen crises can shake life. Without you, will your family be able to meet the requirements in the future? With the term insurance, you will be securing your family to help them receive a lump sum amount to help them take care of their needs.
4. Insurance encourages savings
Several life insurance plans, such as a money-back policy, help create regular savings by allocating some funds in the form of a premium every year. Unlike a basic life insurance plan that gives money back at the time of maturity, a money-back policy pays an amount to the policyholder after a few years of investing in the policy.
5. Insurance gives peace of mind
Along with financial security, insurance gives you peace of mind. Your home insurance policy will help you get coverage for damages to the home. Your family floater medical plans will cover you and your family at the time of hospitalization. Any insurance plan comes in handy at a time of crisis.
FAQ’s
1. How can an insurance company provide a large amount of settlement to the policyholder at an emergency time?
When we purchase an insurance product, we pay premiums, and some pay a fixed amount of deductible to the insurance company. The insurance company collects the amount for all the policyholders and invests the fund securely to accumulate over time and pay out the policyholder when they claim.
2. Which insurance is mandated to buy in India?
Third-party car insurance is mandatory to buy in India.
Final Thought
While no one can predict the future and prevent any unexpected things from happening, all we can do is get some protection cover. Needless to say that insurance plays a pivotal role in your life by helping to provide financial security to you and your family at the time of emergency. Investing in insurance is not merely a tax-saving option, but making small investments over time will offer you security in advance. Most of us always stress why we need insurance anyway or quit the idea of buying an insurance product because it requires a considerable amount of money. But instead, one needs to look at the bigger picture to safeguard life. Insurance premiums could be expensive but not having the correct type of insurance could be far more costly.