Is Life Insurance an investment? 

Before deciding whether insurance is an investment or not, it is critical to understand how they differ. Budgeting, debt management, tax planning, insurance, and investment management are all examples of financial management practises.

Author:IndiaFirst Life | Date:28 Dec 2022 | Time:16:33:00

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Before deciding whether insurance is an investment or not, it is critical to understand how they differ. Budgeting, debt management, tax planning, insurance, and investment management are all examples of financial management practises. 

Investments and insurance are the two most important pillars of a sound financial plan and are two distinct financial products with entirely different goals. By signing up for a life insurance policy, you are effectively providing your family with financial security against potential financial risks in the future. Even though no amount of money can compensate for the loss of a human life, an insurance policy can help you lessen the financial impact your untimely death may have on your family. 

Reasons to consider life insurance as an investment: 

1) Instils the habit of saving: 

To maintain your coverage, you must pay your life insurance premiums on time. A saving habit is ingrained by such scheduled payments. Your money will grow more efficiently if you choose to invest in an insurance plan as an alternative. You must invest your savings in reputable insurance companies that provide life insurance and respectable returns in order to reach your financial objectives. 

2) Return on Investment: 

Generally, life insurance policies have outperformed other investment options in terms of returns. The majority of life insurance contracts provide benefits that no other investment strategy can match. Life insurance premiums are safe investments that offer risk protection. At the end of the period or upon the insured's passing, the money invested will generate good returns and be fully reimbursed together with the bonus (Applicable for Endowment, Return of Premium policies). The money invested and the earnings are safely refunded in both cases. 

3) Achieving risk coverage: 

Investing in life insurance ensures a secure future for you and your family. In the event of the death of the insured, the insurer pays the bereaved family the entire amount, i.e. the sum assured Life insurance also protects the interests of people whose incomes are declining with age,  retirees etc. There are many insurance policies available, and you can select the one that best meets your needs. 

4) Saving on income tax: 

Section 80C of the Income Tax Act is a useful way for individuals to reduce their tax liability. Investments in the specified instruments which are subject to a rebate under this section. The current rebate amount under Section 80C is Rs. 1,50,000 

5) Planning your life stages: 

Life insurance can help you plan your financial goals for each stage of your life. It aids in the planning of your life stage requirements. Life insurance not only provides financial support in the event of an untimely death, but it also serves as a long-term investment. Depending on your life stage and risk tolerance, you can achieve your goals, whether they are for your children's education, marriage, building your dream home, or planning a relaxed retirement life. 


It goes without saying that life insurance is a must-have. It is a risk reduction and protection tool that must be purchased without hesitation or thought. After all, it is a question of a way of life that supports a large number of people. As a result, realise the importance of life insurance and sign up for it for the sake of your family. 


IndiaFirst Life

Headquartered in Mumbai, IndiaFirst Life Insurance Company Limited (IndiaFirst Life), with a paid-up share capital of INR 663 crore, is one of the country's youngest life insurance companies. Our key differentiators are our simple, easy-to-understand products that are fairly-priced and efficiently serviced.We offer a diversified suite of over 46 need-based products & Riders (as of 31st March 2022) catering to varied customer segments, leveraging multiple distribution capabilities and augmenting various investment options. In all, propositions under the categories of Protection, Assured Savings, Wealth, Pension, Health and Group Funds for Employee Liabilities form a complete suite of offerings that help our customers prepare for the certainties of life. Our products are easy to understand and competitively priced with risk management being our core strength.

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