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How insurance can give you financial protection and safeguard your wealth

The Financial Express logo The Financial Express 15-11-2021 Priyadarshini Maji
In insurance, returns are assured, tax-free and safely grow to suffice the need in the future. © Provided by The Financial Express In insurance, returns are assured, tax-free and safely grow to suffice the need in the future.

All of us carry unknown and predictable risks in our lives on a daily basis. While the risks are inevitable, it is ideal to stay ahead by preparing for them.

Naval Goel, CEO and Founder,, says, "One should prepare at least to diminish the velocity of harm reported by its effect by accumulating efficient wealth back-up to manage the survival of him and his family."

Indeed, there are multiple options available to create a stronger portfolio but when it comes to managing the risks accompanied, one should select a plan that gives guaranteed fixed returns that are sufficient to meet the requirements with minimal investments. In such a scenario, Goel adds, "insurance – health and life – comes across as a valid investment option for a person to ensure the safety of their family and their future."

In insurance, returns are assured, tax-free and safely grow to suffice the need in the future. On the other hand, other investment options that are available in the market such as Mutual funds, NPS, Equity Funds, PPF, NPS, etc. come with certain capping, market fluctuations, and marginal returns. Along with that, "these investment options don't get activated or ensure financial protection at the time of the crises of your life," says Goel.

For instance, a health insurance plan with a sum insured of Rs 5 lakh for a 30-year-old man comes with a premium between Rs 8,500 to Rs 9,500 annually, varying from company to company. And term insurance for instance, with 60 years covers for sum insured of Rs 50 lakh usually ranges between Rs 6900 to Rs 8,000 premium annually. Thus, industry experts say, insurance becomes an essential tool for a salaried man living a budgeted life to build a big corpus for future uncertainties.

Moreover, Goel says, "insurance plays a vital role in ensuring secured savings without bearing any risk as it manages the funding for the risk which lets a person continuously grow his wealth for the planned events and milestones such as own retirement, kids' higher education, and their marriage."

Note that, having a big financial portfolio is always good but it becomes quintessential to safeguard that wealth by ensuring that it doesn't get disturbed by unforeseen crises.

Hence, "having insurance is a must and safety entity to park one's money, especially for a fixed income person who can't get access to a bigger amount at once whether it is for the medical expenses or for the survival post the demise of the breadwinner of the family," explains Goel.

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