The unexpected COVID pandemic made people realize that emergencies can be at your door anytime. No one was prepared for such an emergency either financially or mentally. However, COVID was the time when people felt the need for insurance. Before this, the importance of general insurance was still in the buzz, but after the pandemic, insurance like health & term gained significant momentum. Additionally, with things moving online, people found it easier to purchase such insurance online!
Now insurance is one broad term, under which lies different categories like the term insurance, health insurance, asset insurance, etc.
In this blog, we’ll be covering the aspects of the importance of having insurance. Let’s see how insurance can be beneficial for us:
Need of insurance
- Financial Security
As stated above the importance of insurance is felt when an emergency knocks up at your door. Being the breadwinner of the family, the first and foremost thought during such a scenario comes for the family’s security. It could be either financial security or health security. If you’re the sole earner in your then protecting your family after you is the most crucial thing to do.
- Support for Families During an Emergency
Among the various insurances, Critical illness insurance provides financial support to families during emergencies by offering a lump-sum payment upon the diagnosis of a covered serious health condition. This helps alleviate the financial burden, enabling families to focus on their loved one’s recovery without worrying about medical expenses and daily living costs.
- Peace of Mind
Life insurance offers invaluable peace of mind to individuals and their families. It ensures that in the event of the policyholder’s death, financial protection and support are provided to the beneficiaries. This coverage helps cover funeral expenses, outstanding debts, and future financial needs, easing the burden during a challenging time. Knowing that loved ones will be taken care of fosters a sense of security and allows individuals to plan for the future with confidence, making the importance of life insurance a component of comprehensive financial planning.
- Planning for the Future
Insurance for future is a great way of keeping life secure. Whether it’s life, health, or retirement insurance, these policies safeguard individuals and families from unexpected financial setbacks. Life insurance ensures financial security for beneficiaries, while health insurance shields against costly medical expenses. Moreover, retirement insurance, such as annuities or pension plans, provides steady income during post-working years. By securing appropriate insurance coverage, individuals can confidently prepare for the uncertainties ahead, allowing them to focus on achieving their long-term goals and aspirations.
- Tax Benefits
Insurance offers attractive tax benefits, making it a valuable tool for tax-saving planning. Premiums paid towards life insurance policies, health insurance, and certain types of retirement plans are often eligible for tax deductions or exemptions. Additionally, payouts received from life insurance policies are generally tax-free for beneficiaries. These tax advantages encourage individuals to invest in insurance products as part of their overall financial strategy, enabling them to reduce their tax liabilities while securing essential protection for themselves and their loved one.
As a result, insurance protects individuals and their families from unforeseeable risks and financial hardships. It offers peace of mind by providing protection against various uncertainties, such as health issues, accidents, property damage, and even death. Insurance ensures that policyholders are not left in dire financial straits during challenging times, allowing them to focus on recovery and rebuilding.
Moreover, with tax benefits and opportunities for long-term financial planning, insurance serves as an essential component of a comprehensive and responsible financial strategy, providing security and stability for the future.