Should Insurance be used as an investment tool?

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If we were to talk about the insurance sector and the policies at large, most of us would consider this nothing more than a discussion on risk management. Ever since the inception of this industry, most of us have been considering insurance as an angel in disguise that helps cover risk against the specified contingent loss. We cannot really hold a single individual responsible for advocating such a philosophy for the reality was way too different. You will be taken aback to know that this legacy happens to be a result of the marketing tactics that were adopted by the insurance providers back then, which showcased this industry to be a helping hand that would pick you up every time that you happen to fall.

However, with the modernization of this industry you must have had an encounter with a brand new school of thought that spoke about the entangle that exists between these two very important “I’s” that are “INSURANCE” and “INVESTMENT”. In this situation, a layman is likely to interpret this by considering investment as an equivalent or synonym to savings, which would make him or her wonder whether insurance actually happens to come across as an investment tool that helps you save for the future or this simply remains a myth.

Well, in that case I would like to put forth certain parameters that would force every individual to cross out the word myth off their minds. First and foremost at a very basic level each of us is aware of the fact that different types of insurance policies are available to suit our individual needs and requirements. Once we decide on buying a particular policy the next vital element that comes into picture is the premium. One important aspect to be noted in relation to this is that every individual needs to pay the predetermined premium on time in order to keep their policy active and going.

Since, the premium becomes an essential element of the insurance policy, every individual is under the scanner for directing a certain amount of their funds towards the policy that for a common man turns out to be his or her savings. This throws light on the fact that insurance gives a push to individuals to save and thus at a basic level can be considered an effective investment tool.

Similarly, like any other asset or portfolio management company even insurance companies tend to offer tailor-made portfolios coupled with efficient personalized services that give you the complete discretion to alter the delivery on the basis of your individual preference. In addition, like the other investment opportunities provide you with a certain percent of interest over and above your investment even insurance policies tend to benefit you in the form of the bonus that is declared by the insurance providers and given to you on term basis, money-back format or on maturity of your policy.

Not to forget the tax-benefits that the insured can enjoy on a number of policies both at the entry as well as the exit period, which makes insurance an attractive investment route. Apart from this, insurance allows individuals to purchase add-ons that tend to not just extend the coverage of the policy, but also provide vivid benefits that further add to its appeal.

Hence, on the basis of all the facets that have been noted above we can now come to a safe conclusion that insurance comes across as one of the best investment tools and thus individuals should move towards buying insurance policies and enjoy its dual benefits of risk cover as well as that much sought after extra earning.



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