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It is simple to forget the significance of insurance. After all, it does not give you any touchable benefits. It is not like buying a car, for example. Insurance becomes helpful only throughout emergencies—after an accident, an illness, or a death in the family. At such times, insurance is vital for safeguarding your funds. Let us look at how insurance can be helpful for you.
Insurance gives you calm of mind and safety
Insurance cannot defend you against tough times, but it can make softer the financial blow. Life and health insurance give you with a deep sense of assurance. You know that good medical care is within your reach. You rest guaranteed that in the occasion of your premature demise, the life insurance payout will support your family.
Insurance help you get ready for the future
Rising inflation is a drain on your money. Prices stay going up and there is no end in view. Even the prices of basic supplies are rising incessantly. So, why should the costs of education remain inactive?
Child insurance policies and money-back insurance policies assist you get ready for your children’s future needs. You can use such scheme to put aside for your children’s education costs. Characteristically, the returns on insurance products are on the lower side. But the annual premiums over a period of time help you to build up rather a bit. Thus, securing your child’s financial future becomes easier with insurance.
In fact, you can use annuity plans to remain financially independent after retirement. By planning correctly, you can get a steady stream of cash every month for as long as you live.
Insurance policies encourage the custom of saving. Every time you pay a premium of Rs 2,000, it is an investment in your future.
Besides, some insurance premiums are tax-deductible. Under Section 80C of the Income Tax Act, your annual life insurance premiums may be tax-exempt up to a limit of Rs 1.5 lakh. Section 80D gives you exemptions on health insurance premiums of up to Rs 25,000 (Rs 30,000 for senior citizens).
You cannot predict the future, but insurance helps you be prepared. So choose a diverse insurance portfolio to secure the future of your finances.