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Why Should I invest in Insurance?

Importance of Insurance – Why Should You Get Yourself Insured?

Insurance is the process by which people safeguard their interests from loss or uncertainty. It can be said to be a social device that reduces the risk of loss of life or property.

Below are a few benefits that insurance provides:

  1. Provide safety and security:

There is always a fear of sudden loss and Insurance offers the financial support which reduces the uncertainties in business and human life. An Individual or business gets safety and security against critical events.

For instance, for life insurance financial assistance is provided to the nominee of the insured in case of death. And in case of others, security is provided against natural causes like fire, rain, etc.

  1. Generates financial resources:

Insurance is done by paying a set premium amount. These are collected as funds and are invested in government securities and stocks. These funds are then strategically used for industrial development of the country which in turn generates more funds, and that is used for the economic growth. This felicitates employment opportunities and other benefits which lead towards a capital formation.

  1. Life insurance encourages savings:

Insurance is not only used to protect an entity against risks and ambiguities, but it also presents an investment channel. As individual needs to pay a regular premium, this felicitates a habit of saving money. After the insurance contract is over the insured gets a lump sum amount hence encouraging you to save.

  1. Promotes economic growth:

Domestic savings are usually saved in banks which do not invest these saving in long-term investments, hence having no economic growth. But Insurance creates a significant impact on the national economy as this is used for capital investments. This enables to decrease loss, create a financial assurance and promote trading and other commercial activities that promote economic growth and development.

  1. Medical support:

Medical illness is one of the most deadly and expensive factors in an individual's life. Having medical insurance is essential as it manages risk in health. If an individual is a victim of any sudden critical, the medical expense shoots up drastically which can be a problem. Medical Insurance is one of the insurances that look after these types of issues. The insured will get medical support in case he/she requires the insurance policy.

  1. Spreading of risk:

Insurance promotes spreading of hazard from the insured to the insurer. The fundamental principle of insurance is to cover risk among a great number of bodies. A large number of bodies get insurance policies and pay a premium to the insurer. Whenever a loss happens, it is recompensed out of funds of the insurer.

  1. Source of collecting funds:

When substantial funds are collected through premiums, they are used for industrial development in a country. This accelerates the economic growth of that country. This facilitates employment which increases the investment. Therefore, insurance has become an important source to enhance a capital formation.

Six Insurance Policies by Kotak Mahindra Bank

Insurance companies in India like Kotak Mahindra provides Insurance policies for various needs and benefits. Below are the six insurance policy types that can make your future secure with Kotak.

o    Term Insurance Policy

This is an affordable insurance play powered by Kotak Life which provides financial security and protection ensuring comfort and security to an individual's family. In case there is an event of a death of the life insured then the beneficiary will receive the death benefit as per the plan. Kotak e-Term plan is a pure protection insurance plan. Kotak e-Term Plan has been specially designed to let an individual provide assurance to their family.

Benefits of Term Insurance are:

  • Affordable Premium Option
  • Add - on benefits
  • Tax savings

o    Whole Life Policy

By participating in the whole life plan, Kotak offers protection up to the age of 99 years. An insured also gets simple reversionary bonus declared from 1st policy year till the end of Premium payments and Cash Bonus after the expiry of the Premium payment term. You can opt to either get bonus pay-outs or receive an accumulated pay-out as per the policy. You can receive more value for money through discounts in the premiums for high sum assured on maturity and also receive Tax benefits.

Benefits of Whole Life Policy are:

  • Death Benefit
  • Survival Benefit
  • Maturity Benefit
  • Tax Benefits

o    Endowment Policy

Kotak Premier Endowment Plan is a long-term savings and protection plan that gives financial security to cope with unfavourable odds along with the capability to save for your future economic needs. This plan provides guaranteed profits in the first five policy years, and bonuses start collecting from 6th year onwards, all this put together builds up a lump sum amount for you to have a stable future.

Benefits of Endowment Policy are: -

  • Guaranteed Additions
  • Earn bonus
  • Convenience
  • Additional Protection

o    Money Back Policy

Kotak Premier Moneyback Plan is a savings cum protection plan which gives massive cash pay-outs at frequent intervals depending on the Policy Term and Basic Sum Assured chosen. Your savings will mount with yearly declared Reversionary Bonuses and lump sum maturity addition to being paid out on maturity. The plan also gives an additional cover for death due to an accident, thus providing you with excellent life protection.

Benefits of Money Back Policy are:

  • Death Benefit
  • Accidental Death
  • Maturity Benefit
  • Tax Benefits

o    ULIPs

Unit-linked insurance plans (ULIPs) are long-term investment options that provide you with financial security and an opening to generate market-linked returns. A part of your premium is focused towards offering you insurance and meeting administration costs while the rest of it is invested into a fund.

Benefits of ULIPs are:

  • Protect your child’s future
  • Secure funds for critical milestones
  • Plan for your retirement

o    Annuities and Pensions

Kotak Life Insurance presents Kotak Premier Pension Plan that helps you to collect a retirement kitty for the golden years to help you manage a comfortable and worry-free retirement life. This plan is a participating plan with guaranteed benefits on death and vesting. It provides the promised additions in the first five policy years, and bonuses accrue from 6th year onwards, all this put together to build up a corpus for your protected future.

Benefits of Annuities and Pensions are:

  • Guaranteed Additions
  • Assured Benefit
  • Vesting Benefit
  • Death Benefit
  • Tax Benefits

Conclusion:

Therefore, insurance is an essential factor in an individual's life, and Kotak Life Insurance is one of the fastest growing insurance company in India to provide Kotak insurance plans products covering over 18 million lives in India and growing. They deliver high customer support and satisfaction through empathy and understanding.

 

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