Is life Insurance a Good Way to Build Wealth￼
All of us work hard to accumulate wealth by investing money across various financial instruments to get the maximum returns possible on your investments. One of the best ways of doing so is by investing in a life insurance policy that can help us build wealth over time. It offers the double benefit of a life cover along with wealth creation which isn’t possible with other types of investment plans that only offer the wealth benefit without the assurance of a life cover.
Let’s look at 3 ways life insurance plans allow you to build wealth over time which should help clear any doubts and allow you to make better investment decisions early on in your life!
Creation of Wealth
Why do all of the hard work yourself, when you can let your investments work as hard as you do? Some life insurance plans come with the option of using our premiums as investments across different stock options to maximize your return on investment. This way, your wealth grows over time, while you concentrate on living your dreams and ambitions.
Section 80C of the income tax act allows you to save tax on the premiums paid on life insurance plans. This helps you save money that you would otherwise end up giving away in taxes while ensuring that the same amount of money is going into getting you a life cover while being invested in growing your wealth at the same time. Moreover, the maturity amount that you get on your life insurance plan is also tax-free under section 10(10D) of the Income Tax Act. However, tax laws are subject to change from time to time.
Grow Wealth and Save More
The best part about a life insurance plan is that you can lock your premium rates by investing early on in your life. A 1 crore life insurance will cost you much less in annual premiums if you invest in your 20s compared to the premiums you would be paying if you invested in your 30s. Therefore, if you really want to see your wealth grow, then invest while you are younger to see big returns on your investments.
Apart from these 3 ways that life insurance plans help you grow your wealth, there is one more benefit that it offers, that goes a long way in improving your overall quality of life.
Sound Sleep Benefit
When a person is financially secure, it leads to more peace of mind which in turn results in better sleep. So, when you are aware that you have invested well in advance to ensure the financial stability of your family, and given yourself and your family the gift of a financial safety net, your overall quality of life would see a dramatic uptick leading to better decision making and success in your career.
If you truly want to grow your wealth over time, there is no better way than to invest in a life insurance plan. There is a diverse list of life insurance plans available in the market that can help you achieve financial independence by growing your wealth over time while providing you with a guaranteed life cover so that your family’s financial future is safeguarded against any uncertainties in life. So, if you really want to make a smart investment, the time is now.
We hope that the points we covered in this article will help you understand how life insurance can help you grow your wealth, secure your life, and provide you with better returns over time. In the end, life insurance is one of the only few investment options that give you just more than life cover, it guarantees a better quality of life now, and in the times to come!