Life is quite unpredictable in nature. We never know when things can go utterly wrong and cause severe damage to all the progress that we have made in the years gone by. And unfortunately, not a lot of people understand the importance of insurance. Imagine being the only breadwinner in your family and then losing that source of income due to a disability caused in an accident. How will you sustain your and your family’s livelihood in such a scenario? In the worst–case scenario, how will your family survive in your absence?

While we cannot predict the future, we can definitely stay prepared for such troubled times. This is where an insurance policy can help you immensely. To help you get a clearer idea, here are 4 points that show the role and importance of insurance:

• Helps protect your savings

  With the inflation rates increasing across the globe, it can get quite expensive to afford basic necessities such as medical treatment or even car repairs. As a result, unforeseen expenses can burn a hole in your pocket and compel you to use up all of your savings. However, if you have the right insurance policy, you can stay financially secured against liquidating your funds for many unforeseen expenses, such as accidents or illnesses.

• Supports your family in your absence

  A life insurance policy offers a pre–decided sum of money to the nominee when the policyholder passes away. This can prove to be extremely beneficial to the family of the policyholder as even if there is no source of income in the household, they do not have to worry about meeting their basic needs. These funds can either be taken as a lumpsum amount to tackle big expenses or they can be planned and received every month as a source of regular income. As a result, your family does not have to worry about keeping the food on the table even in your absence.

• Supports your investment journey

  ULIPs, short for Unit Linked Insurance Plans, are insurance policies that not only offer life insurance coverage but also help you manage and maintain a portfolio of securities. Hence, these insurance policies pose to be a great investment tool for many risk–averse investors. Most ULIPs allow you to set the weightage of equity and debt investments in your portfolio and hence, help you earn returns that are best suited for your long–term financial goals.

• Tax benefits

  A major benefit of insurance coverage is the fact that premiums paid for certain forms of coverage are eligible for tax deductions. For example, the premiums you pay on a range of health insurance policies qualify for tax benefits under Section 80D of the current tax laws. You can claim these tax benefits on the premiums you pay for your own medical insurance as well as medical insurance plans for your spouse, dependent children, and aged parents.

Now that we see the importance of insurance, do make sure to always review your insurance plans annually and make necessary changes to the coverage to keep up with your evolving needs.