Recently when I thinking about how to use my hard earned money, I came across may options like investing in mutual funds, trading, keep it in fixed deposit and get interest or I buy an insurance policy and secure my retirement and loved ones future.
After much research I decided to invest in buying Life Insurance being the best option which will fulfill my retirement needs and help by family financial once I am no more.
So when I talk about choosing life insurance policy as an investment, I plan to decide on Permanent Life Insurance, well known as Whole Life Insurance. The main criteria to select Whole life insurance against term life insurance is: it has a portion of cash value and does not has expiry date.
The part of premiums paid in this policy is used as investment like mutual funds to increase the cash value to help in a long run and the remaining is used for insurance policy. So essentially, you will paying for your fund investment and insurance.
And if you bad in handling money, then buying life insurance will definitely help you in long term. Just like anyone else, there could be a possibility of not making a correct decision, however, life insurance investment is liking killing two birds by one stone: you get life insured, necessity of modern world and investment to take care of your family.
The benefit you will get by investing in Whole Life Insurance policy will be tax redemption, also, you get an option to borrow money against your cash value without paying any penalty, unlike other retirement plans where you pay high charges to withdraw before the certain age. Life insurance is indeed an option to income in sudden then and you have huge lined-up expenses like mortgage, children’s education, marriage, home loan etc.
There are many other benefits also in buying a life insurance policy. Unlike other endowment policies, insurance plans are easy to understand and provide saving and risk coverage. The cash value component in insurance comprises saving and risk cover. As it’s not easy for anyone to divide the premium amount so insurance companies do the saving on his behalf as planning financial stuff is quite complicated.
Life insurance policies are easy to compare and can be bought basis the price. It’s simple and easily understandable. You browse and see the competitive rates yourself online. Compare the rates, read terms and conditions and click buy. And this is the reason insurance is become a commodity in one’s life.
Also, opting out of policy is easier than managing invested money. In policies, if you stop doing premium payments, the policies ceases. Whereas in money investment you have to do complete market analysis before making a decision to not invest more. Not only this, many insurance plans convertible and renewable. You can opt to for another policy without going under medical checkup.
Plus you also get the flexibility to pay premiums. Choose monthly, quarterly, and half yearly or pay the complete amount at the beginning. But remember the premium amount is selected basis the age. So the younger you are, lesser the premium and advancing with age might lead to pay higher premium.
And the top most benefit you get in insurance policies is they give tax benefit under section 80(C) and 10 (10) D, where you might end up paying huge tax if you are planning to invest money in any other source.
So, before you retire and get old, invest in life insurance to your own betterment.