The future is always uncertain is the favorite ploy used by most insurance companies. However, leaving aside the sales pitch, they do have a point. Thus, as foresight and future planning are important, it is equally essential that a working individual understand the benefits of having a well planned out insurance policy. This doesn’t mean that you’re worried about dying nor is it a matter that can be postponed for when you feel you’ll earn better. Insurance doesn’t only insure the safety of your loved ones in case of death but also takes care of medical emergencies. When the policy matures, your money has multiplied too.
At an individual level, there are two types of insurance policies people opt for generally:
- Life insurance (provides protection plus investment)
- Property insurance (provides only protection)
By going for life insurance, there is less of a worry in case of accident or illness as well as a nest egg amount for your retirement days.
A more secure future
At the grass root level, insurance will provide security and safety as even after the term of insurance has expired, you get back the money to use post retirement, if opted for life insurance. You can insure property against loss due to damage, accidents or disappearance. That makes you breathe easy in case the house you paid all those mortgage installments for suddenly burns down or your new Chevy is damaged in an accident.
A protection cover
There is another aspect in which insurance protects mortgaged property. If the owner of the property dies, then by default the lender can take it. In such an instance, the insurance money comes in handy to clear off the unpaid debt and also guarantees that all is not lost in case there is destruction of property.
No need to beg or borrow
Once having planned for a rainy day, there will be no need to beg or borrow. If the sole bread winner dies at least the other members of the family aren’t left destitute. Furthermore, not everyone has generous friends or relatives and thus, in an emergency, it is better to have insurance money than borrow from a moneylender at high interest rates.
A means of saving
If you are looking for a way to save as well, then property insurance will not help as its basic aim is the protection of property. A life insurance on the other hand has the two-tier approach of a means of protection as well as investment. One good thing about such saving is that every month a fixed amount is put aside as it is mandatory. Most people never actually get around to saving so this compulsion ensures some money is kept aside. Besides, you cannot withdraw the amount and so, it’s safe from the sudden urge to spend. Moreover, one big plus point is that though your premium deposited may not cover the policy money at your time of need, you will still get the policy entitled amount.