Kathmandu. Insurance is also seen as a tax-saving product. However, it is a serious mistake to think of insurance as a means of saving tax or increasing wealth.
The real purpose of insurance is not just to make money. It is a financial tool to protect your family from financial hardship during this crisis.
Mutual fund SIP helps you grow your wealth. However, if someone in your family suddenly falls ill or something unpleasant happens to the breadwinner, then all your savings can be wasted in an instant.
placing risk burden on the company
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Insurance means that by paying a premium, you transfer a significant risk of your life or health to the company. For example, if you know that paying Rs 15,000 per year will cover hospital expenses up to Rs 10 lakh for your entire family, then you can invest the rest of your money without any fear. This eliminates the need to withhold large sums of money in the bank for hospital expenses. Insurance protects your family from 3 major crises: financial support in the event of the death of your breadwinner, protection against significant hospital expenses, and protecting your family from the burden of past debts.
Pros of keeping the two separate{
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Insurance and investment should always be kept separate. It is advisable for you to buy term insurance. Which provides enough cover for your family for a very small amount. Then invest the remaining money in mutual funds or other financial instruments to maximize your investment.
Why is it important to tell the truth while filling out the form?
Many times people think that if they have insurance, then the company will definitely pay. However, this is not always the case. It is important to remember that when purchasing a policy, you should never hide your previous medical condition or smoking habits. Revealing the truth may increase your premiums slightly. But, in times of crisis, your family’s claim will never be denied.
Always check the company’s claim payout ratio (CSR) while buying an insurance policy. Choose a company with more than 95% CSR to ensure your family doesn’t have any difficulty in getting money.
