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Is life insurance a good investment plan?

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Is life insurance a good investment plan?
August 09, 2023

Whenever we talk about financial gains and capital building, we must be sure to include insurance in it. After all, insurance serves to secure the financial corpus that you have accumulated throughout the years of hard work and careful savings. Life insurance acts as a financial guarantee for your loved ones and keeps their future secure even in your absence. The benefits of having a life insurance plan can hardly be understated and it is very important for everyone to take out a specific plan that can offer maturity benefits and also the main corpus benefit to the nominee(s) in the event of unfortunate demise of the policy subscriber.

However, when viewed from the perspective of an investment background, what exactly does life insurance offer? Well, a life insurance plan offers several benefits that will make us realize the immensely beneficial features that come with it. These benefits include:

1. Relief from financial worries:

Everyone is driven by the demand of financial nature and everyone wants to maintain the security of their corpus so that their loved ones can lead carefree lives even when they are no longer there to support them. Life insurance dos just this. It enables you to leave behind a guaranteed support system for your loved ones and thus helps you to secure their future and aspirations. This means that you don’t have to worry about the financial constraints that arise due to life’s uncertainties.

2. Fulfilling your dreams:

Financial strength is the determining factor that decides the goals in life. You may have wanted to achieve any goal like purchasing a house or a vehicle in the immediate future. Insurance comes with many varied and diverse plans that allow you to create a sufficient funded corpus for meeting the various goals at any point in life. This includes any short term goals like regular, periodic earnings from the plan or any long term goals like funding your child’s education or saving for your children’s marriage etc.

3. Loan option from banks:

There may be instances when you require a large sum of money in a short span of time. Having a whole life insurance plan in place comes to your rescue because it gives you the option of taking out a loan from the bank (against your insurance plan). A whole life insurance plan has a long term of 100 years which means that your nominee(s) get the maturity proceeds. You can always take a loan against the surrender value of the plan and meet your expenses.

4. Exemption in taxes:

As a good investor, you always appreciate the value of saving on taxes and the impact that it can have on your investment returns. In this context, an insurance plan is a very beneficial as the premiums payable towards it are eligible for tax exemption under Sections 80C and 10D of the Income Tax Act, 1961. Therefore, you get to save taxes, while securing the financial strength of your loved ones.

HDFC Life offers term insurance plans that have been devised for protecting the future of your loved ones at all times and allowing you to lead a stress-free life. Read more about best investment plans in India here.    

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ARN: ED/12/19/17049

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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