Is Life Insurance A Good Investment Option?

Besides providing a life cover to the life assured that offers financial protection to his/her family in the face of an unfortunate event, a life insurance policy can also help grab investment opportunities to fulfil long-term goals. Here, you should note that the investment returns are not always discussed in monetary terms but can be seen as investing in the family's future financial security. Read on to find out some arguments that will convince you about the effectiveness of a life insurance policy as an investment option. 

Is Life Insurance A Good Investment Option?

Here are some ways in which a life insurance policy can be used as an effective investment tool.

1. Help Fulfil Your Long Term Goals

The right life insurance policy can help you realize your long-term goals, like purchasing a new house or a car. Moreover, the dual benefits of life coverage and investment in some policies like ULIPs can help fulfil such dreams through returns on these investments.

2. Help in Meeting Children’s Expenses

A child's life insurance plan can help you safeguard your children's future and ensure that you have funds to support your child's dreams and education. In addition to this, it acts as a financial safety net and provides benefits on special occasions like higher education, marriage etc. Moreover, you can even nominate your children as beneficiaries who will be paid death benefits after your demise. 

3. Acts As Income Replacement

The death of the life assured, who is also the breadwinner for the family, can put the family in a financial crisis with no earnings. Here, death benefits paid in regular monthly instalments can act as income replacement if the life assured dies within the policy duration. This will help ensure the continuation of the family's current lifestyle and carry out their day-to-day expenses after your demise. 

4. Help in Loan/Debt Repayment

The whole burden of the loan or debt repayment falls on the shoulder of the life assured’s loved ones and dependents if he/she dies before repaying all the instalments. The situation worsens when the life assured is the sole breadwinner of the family. Here, the right life insurance policy can provide death benefits which can be used to repay the loan or the debt and save your family from a debt trap. 

5. Plan Your Retirement 

Through retirement plan policies, the life assured is provided with monthly pensions which helps in income generation even after retirement. This kind of investment made in the life insurance policy will help ensure that the life assured does not depend on his/her children, friends or relatives in old age. 

6. Help in Medical Emergencies

The provision of offering financial relief in troubling times through the rider benefit of a life insurance policy is another reason emphasizing the importance of the policy as an excellent investment option. For instance, suppose you have a family history of illness like heart attacks, cancer or kidney damage; in this case, you can buy the critical illness cover. Moreover, if you pass away due to an accident, a death cover rider with additional accident cover will help cover the accidental costs.

Take Away

Through the arguments given above, it can be concluded that a life insurance policy can be an exceptional investment tool for you and your family. Hence, it is essential to read all the terms and conditions of different policies offered by various insurance providers to select the right one at affordable prices to get maximum investment benefits.  

Also Read: Comparison: Life Insurance vs Term Insurance

What If I Don’t Renew My Life Insurance Plan?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.