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Plan Your Personal Finances Well and Invest In Good Insurance Policies

What do you understand by personal finance or maintaining a financial portfolio? By personal finance people generally refer to their savings and investments. All of us do some savings or some investment in our lifetime. Most of the time people think of securing their future when they opt for different financial products. But before choosing any financial product you must verify all the advantages and disadvantages. Among all the different types of investments, insurance has played a very important role from a very long time. Let me tell you about different aspects of it.

Insurance can be of different types. Broadly we can segregate insurance into two types, one is life insurance and the other is non life insurance. Further we can classify life insurance into normal insurance and medical insurance. Let me explain each one to you. Life insurance deals with living beings and non life insurance deals with your properties. Let us come to non life insurance first. Non life insurances are not generally used for investment purposes. People go for non life insurances to secure their property. For example you insure your car, your house, and your jewels and so on to cope up with any unforeseen dangers like protection from thieves. Generally these types of insurances never give any sum return. You will get the evaluated amount if your property gets harmed. Only benefit you may get is the income tax exemption for your premium amount.

When we consider the life insurance first we should discuss about medical insurances. Medical insurances in general also do not provide any guaranteed sum of return. Generally premiums are quite low and you will get income tax exemption for these products too. You will be entitled to get the agreed amount only if you get hospitalized ever in your lifetime. Medical insurances usually continue for lifetime if you keep on paying the premium. Hence medical insurances are also known as whole life insurance. On the other hand normal insurance products can act as investments. Sometimes they are known as term life insurance as the insurance tenure lasts for a term period of ten years or twenty years. You have to pay the premium which will get accumulated for the said period and at the end of that period, you will receive the amount along with the interest. And sometimes over and above the interest there are some added benefits offered with such insurances too. Income tax benefits are also included in this as one.   

Hence if you are thinking of saving or investing your personal finances, include insurance too. It will cover you, your family and dependants as well as your properties from damage and would provide a financial cushion too.

Peter Christopher

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