Why Life Insurance?
Life Insurance
Life Insurance is a contract between insured person and insurance company under which a sum of money is paid to him or his heirs, on the happening of a certain event. The income of the family depends upon the Karta. In case of death of the Karta, the income of the family also ceases and under these circumstances the family is left in a difficult situation. Life is uncertain and this uncertainty is the risk due to which the necessity of some coverage against the financial loss arises. Insurance substitutes this uncertainty by certainty.
Why Life Insurance?
Life Insurance has come a long way from the earlier days when it was originally conceived as a risk-covering medium for short periods of time, covering temporary risk situations, such as sea voyages. As life insurance became more established, it was realized what a useful tool it was for a number of situations, including:
- Temporary needs / threats
- Regular Savings
- Investment
- Retirement
- Fast Track Life
- Nuclear Families
- Job demands
- Traveling
- Security
- Tax Benefits
See the table below, you will get an good idea about Life Insurance and necessary and its Positive outlook.
| Instrument | Safety | Liquidity | Post Tax Returns | Tax Efficiency | Life Cover |
|---|---|---|---|---|---|
| PF | High | Low | Good | Good | None |
| Shares | Low | Average | Uncertain | Low | None |
| KVP/NSC | High | Low | Average | Low | None |
| Bonds, FD | Average | Average | Low | Low | None |
| Mutual Fund | Average | High | Uncertain | Average | None |
| Post Saving Schemes | high | Low | Average | Average | None |
| LIFE INSURANCE | HIGH | LOW | GOOD | HIGH | YES |