Five Basic Reasons to Buy Life Insurance

Nutan Gupta

04 Oct 2016

Purchasing life insurance is an essential step while planning your financial budget. Life is full of uncertainties and therefore it becomes highly important for the breadwinner of the family to ensure that the family is well covered in case of one’s untimely death due to accident or illness. You would not want to see your family struggle for every penny after your death. They should be able to pay their household expenses, repay debts, while remaining uncompromising on their lifestyle.

Life insurance offers something for all, ranging from children to the elderly. Therefore, consider buying a life insurance policy early in life, especially when you are young, hale and healthy. If you insure yourself at a young age, you will need to pay lesser premium and your family will definitely reap the benefits of good investment decisions you take during your lifetime. So, make hay while the sun shines. Get yourself insured.

Financial security for family

Life insurance offers financial support to the family in case of the breadwinner’s death. Hence, it is the most important aspect of your life.

Repaying debt

Do you ever imagine who would handle financial liabilities, such as home loan, car loan, personal loan, and mortgage during a crisis when you are no more around? The answer is simple! Only life insurance can save your family the blushes in this scenario.

Formulate long-term goals

As life insurance necessitates long-term investment, the policyholder can formulate long-term goals. Buying home and developing retirement corpus are examples of such goals. It gives you diverse investment choices, which are available with different types of coverage.

Fulfill retirement goals

We all work hard to earn enough money so that our retirement life is without many challenges. Investing in life insurance offers you a regular source of income as it is structured to replace the lost income source. So, put some money in pension plans and enjoy a steady income after retirement.

To avail tax benefits

Life insurance also offers tax benefits. The premium you pay on your policy is eligible for tax exemption under Section 80C of the Income Tax Act.

Get a Term Insurance Cover Now!

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Why to Choose Mutual Funds Instead of Directly Investing Into Equities?

Whether to invest in equities or mutual funds is a question that has plagued every investor. As someone who needs the best value for his/her investment should you invest in equity directly or via mutual funds?

Let’s start by first understanding what these two terms ‘equities’ and ‘mutual funds’ stand for-

Equities- Equities generally represent ownership of a company. If you own any equity in a company, you are a part owner of the said company (depending on how much equity you own).

Mutual Funds – It is an investment scheme which is professionally managed by an asset management company. It pools together the resources of a group of people and invests their money in equities, debentures, bonds and other securities.

Why choose mutual funds over equities?

For people who’ve never invested in either stocks or mutual funds, it is hard to know which is better and where to start. Broadly speaking, if you are a novice investor, mutual funds are not only less risky but also way easier to manage. Here are some ways in which investing in mutual funds is beneficial as opposed to investing in equities -

Diversification

Mutual funds provide more diversification as compared to an individual equity stock. When you invest in equity, you are investing in a single company which has its inherent risk. For example, if you invest Rs.20,000 in buying equities of one company, you could face a total loss if that particular company performs poorly in the market.  

If you invest the same amount in mutual funds, it will be invested in different kinds of stocks and financial instruments, high-risk and low-risk both, so you might not face total loss even if one company does poorly.

Scale of Investment and Lower Costs

For an individual investor buying and selling stocks is a difficult task due to its high price. Thus, any gains made from stock appreciation are nullified if the overall trading costs are considered. Comparatively with mutual funds, as the money is pooled from a large number of investors, the cost per individual is lowered.  

Another advantage of mutual funds is that you don’t need to invest large sums of money. Buying equities for a profitable venture needs huge amounts of money, a minimum of few lakhs. With mutual funds, you can start with Rs.1000 and earn profits on that as well.

Convenience

Keeping an eye on the markets everyday is a time-consuming business, especially if you are investing as a side gig. There are people who spend their lives studying the market and still end up sustaining heavy losses. Though investing in mutual funds does not guarantee high returns, it is stress-free and needs less work as compared to investing in equities.

To sum it up

It is important to remember that mutual funds have their own disadvantages as well. Thus, as with any financial decision, educating yourself and understanding the suitability of all the available options is the ideal way to invest. 


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Five Basic Reasons to Buy Life Insurance

Nutan Gupta

04 Oct 2016

Purchasing life insurance is an essential step while planning your financial budget. Life is full of uncertainties and therefore it becomes highly important for the breadwinner of the family to ensure that the family is well covered in case of one’s untimely death due to accident or illness. You would not want to see your family struggle for every penny after your death. They should be able to pay their household expenses, repay debts, while remaining uncompromising on their lifestyle.

Life insurance offers something for all, ranging from children to the elderly. Therefore, consider buying a life insurance policy early in life, especially when you are young, hale and healthy. If you insure yourself at a young age, you will need to pay lesser premium and your family will definitely reap the benefits of good investment decisions you take during your lifetime. So, make hay while the sun shines. Get yourself insured.

Financial security for family

Life insurance offers financial support to the family in case of the breadwinner’s death. Hence, it is the most important aspect of your life.

Repaying debt

Do you ever imagine who would handle financial liabilities, such as home loan, car loan, personal loan, and mortgage during a crisis when you are no more around? The answer is simple! Only life insurance can save your family the blushes in this scenario.

Formulate long-term goals

As life insurance necessitates long-term investment, the policyholder can formulate long-term goals. Buying home and developing retirement corpus are examples of such goals. It gives you diverse investment choices, which are available with different types of coverage.

Fulfill retirement goals

We all work hard to earn enough money so that our retirement life is without many challenges. Investing in life insurance offers you a regular source of income as it is structured to replace the lost income source. So, put some money in pension plans and enjoy a steady income after retirement.

To avail tax benefits

Life insurance also offers tax benefits. The premium you pay on your policy is eligible for tax exemption under Section 80C of the Income Tax Act.

Get a Term Insurance Cover Now!