As much as we shun insurance agents, let’s consider the fact that insurance is indeed an important contingency in the future. However, that does not mean you have to subscribe to a pile of policies, leaving you no money for food. Life insurance offers dual benefits in terms of savings and protection. Here’s why it is regarded as an investment tool:
• Risk cover – Life is full of surprises, some pleasant and some unpleasant. In an unpleasant scenario, when a life is lost or there is a disability, life for loved ones, family and the affected individual still need to go on. A disability may also mean the loss of a job and this is where insurance provides the cushion of financial relief.
• Planning for various stages in life – life insurance is also a good way to save for the kids education, retirement or medical bills later in life. Endowment and investment-linked plans offer good returns, as what is redeemed will amount to more than the initial investment.
• Protection against rising medical costs – with the rising cost of living and healthcare, it is wise to invest in a good medical insurance plan for the future. Medical insurance plans offer protection and financial relief in the event of a sickness or a major expense with regard to medical fees. With the cost of hospitals and medicine rising in leaps and bounds, it is good for people to subscribe to good medical plans while they are still in employment.
• Tax deduction – those who subscribe to life insurance policies enjoy tax deductions on an annual basis. So why pay more tax when you can use the tax deduction to save for your future.
• Asset protection – as much as we all wish for the best, we must also be prepared for the worst. Insurance is a good way to buffer the loss of assets. Insurance is able to provide financial relieve in the event of a theft, fire or losses incurred through other ways.
However, one should be wary when selecting an insurance agent. Be sure that he or she helps you understand the fine print in the policy and never subscribe to something that you are not quite sure of. Make sure that you receive your policy book once you have signed up for an insurance policy. Pay your premiums directly to the insurance company and refrain from giving it to the agent.
In an effort to avoid the nuisance of insurance agents, we sometimes fail to see the importance of insurance. Source for a good agent through the recommendation of friends and colleagues and try not to subscribe to policies over the phone, no matter how good they sound. Recently there has been a spate of incidents where insurance companies offer policies on the phone, having obtained contacts from telco companies – it is best to avoid subscribing to these because, before you sign up for a policy, it is good to first meet the agent, look through the financial projections made available by the insurance company and review alternative options or plans. So don’t let anyone talk you into subscribing to insurance on the fly
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