31/08/2019
WHY LIFE INSURANCE IS NECESSARY?
• As we all know whenever we purchase new vehicle we are bound to do insurance for it otherwise government won't allow us to ride that particular vehicle. So out of compulsion we do that insurance. Same happens to life cover of earning individual of family, but there is no compulsion from government so we do not opt for it.
• But as the question itself is why the life insurance is necessary so I would like to post some points why it’s necessary to do it.
1. To provide financial protection for family, in the absence of bread earner.
2. To inculcate habit of savings. As there are lots of types of life insurance available in market, out of which some are provide fixed returns with insurance cover. So if any one opt that you can easily have some of savings.
3. Help meeting financial goal. As I already pointed out in the above point regarding plans which have some fixed returns on your premium paid so it can help you to achieve some of your goals like child's higher education, your retirement, personal loan etc.
4. It saves tax. As I already pointed out in the example of vehicle insurance that there is n compulsion for any person to take life insurance so for that matter government provide some benefits for life insurance so that public may opt for it and saves on taxes paid to government. So government give tax exemption up to Rs 1,50,000 in given financial year under income tax act 1961.
• So for different types of insurance I will write another post in coming days. For more details you can contact me on comment section.
