Life insurance as an “investment” option

Life Insurance is an attractive option for investment. While most people recognize the tax saving potential of insurance, many are not aware of its advantages as an investment option as well. Insurance products yield more funds compared to regular investment options, and this is besides the added incentives offered by insurers. 

In life insurance, unlike non-life products, we get maturity benefits on survival at the end of the term. In other words, if we take a life insurance policy for 20 years and survive the term, the amount invested as premium in the policy will come back to us with added returns. In the unfortunate event of death within the tenure of the policy, the family of the deceased will receive the sum assured.

Now, let us compare insurance as an investment option. If we invest Rs 10,000 in PPF, our money grows to Rs 10,950 at 9.5 per cent interest over a year. But in this case, the access to our funds will be limited. We can withdraw 50 per cent of the initial deposit only after 4 years.