Actually the real question should be should I invest in insurance or not. The answer is if you are not investing in insurance, this is the dumbest mistake you can make in your life. A mistake for which you may or may not repent buy surely your loved ones would face the consequences.
The returns on any investment are calculated by simply counting the money you’d receive at the end of the investment term. Insurance is the ONLY financial instrument that can give you 1000x or even more than that in return of your invested amount. Let’s understand this in simple terms. Let’s say Ajay invested 10,000 in fixed deposits, 10,000 in mutual funds and 10,000 in a insurance plan. The 3 different investment option will give him different returns.
Life is full of uncertainties, let’s say Ajay meets with an accident and dies. The life insurance investment will now give him 1000 times the return (can be more or less depending on the plan he chooses) and the other two investments would be simply transferred to his heirs. Now lets consider all goes well What will happen after 5 years, the fixed deposit would mature (maximum fixed deposit tenure is 5 years) and he would receive the invested amount and the interest thereon.
Now, Ajay will have to re-invest his money or use it. If he plans to reinvest he would be paid the current interest rate as per the market conditions. Looking at the past records and the future possibilities it is 100% sure that he interest rates are going to fall. Since he also invested in mutual funds, he may or may not make money on the invested amount. As it is very clearly said in all advisories that mutual fund investments are subject to market risks.
It is not that every money invested in mutual fund is lost. Mutual funds investments are not a easy thing to do. One must be aware of the market conditions, global scenario, war, political stability, the product performance and future, etc. Most of the people do not understand this and invest on references / tips. The investment being done in mutual fund is more like a gamble for them. The basic rule for investing in market is to diversify your portfolio, invest in good companies, and book profit and losses at appropriate times. All this required research, daily investigation and loads of time.
The best thing about the investments made in insurance is that the returns are guaranteed and fr a long period. No other investment option can beat these two qualities.
Insurance is the ONLY assured and long term investment option that you have. The cherry on top of the cake is the insurance factor, if something happens to you your family will be financially compensated.
To understand why you need insurance, comment below or contact us for a personal session.