Why Life Insurance Is The Safest Investment Among The Investments?

Hello friends..,

Here we are discussing whether insurance is an investment or not.  I have found a article which clears a lot of doubts from our mind.. Please go through it..

Alas!!! Had I invested in life insurance. Today I wouldn’t have fallen into this dump". This is the statement that most people over the world have been making after facing current downturn in the economy, that’s being termed as "recession". The average investor even though aware of the tenure that the recession lasts through fail to get themselves insured against life, most of them considering this module only to be a tax-saving instrument. Other then avoiding the current financial crisis Insurance does prove to be a source of income when you are actually out of one. You could be retired/ fired from work/ bankrupt, moreover on your demise it is the money that invest in Life insurance policies that takes care of your family. Fortunately in recent times there has been tremendous growth in the number of Life Insurance companies, each of them coming up with their effective and convenient schemes that will ultimately benefit the investors.

Here are some stats regarding it...

Just about 10 per cent of white-collared professionals and businessmen invested in shares and an overwhelming 87 per cent still consider life insurance policies as the most preferred investment avenue.

This was the finding of an AC Nielsen-ORG Marg survey, conducted in association with Tata AIG Life.

No, the latest stock market crash has nothing to do with investors' aversion to dabble in equities, as the survey was conducted in April when the stock market was actually hitting new peaks every day.

The survey focused on financial and retirement plans of 300 people across Mumbai, Delhi and Bangalore from the socio-economic class A and B1 in the 30-38 age group.

It covered middle-level and senior executives with educational qualification of graduation and above, and businessmen with junior college background.

The second most preferred investment option was bank deposits (39 per cent), followed by NSC/ NSS/ PPF (22 per cent). A mere 11 per cent invested in mutual funds, 10 per cent in equities, 9 per cent in pension plans, 4 per cent in company deposits, bonds, UTI, chit funds and 1 per cent in debentures.

Mumbaites seem to have bigger appetite for risk compared with people in Delhi and Bangalore. A higher percentage of respondents - 19 per cent of Mumbaikars - preferred to invest in shares compared with 3 per cent in Delhi and 9 per cent in Bangalore.

Overall, in Mumbai, investments in shares and bank deposits were found to be significantly higher than that in the other two cities. In Bangalore, investments in NSC/ NSS/ PPF and mutual funds were significantly higher than in Delhi, where pension plans and chit funds found relatively more takers.

Life insurance was viewed as a long-term investment option by nearly all the respondents (87 per cent), irrespective of the age at which they expected to retire. This was very different from mutual funds, in which an inverse relation between the propensity to invest and retirement age is observed.

Nineteen respondents wanted to invest in mutual funds before turning 50, 15 intended to invest between 50-60 years and four wanted to invest at the age of 60-70.

When asked whether the amount invested was enough for them to live comfortably through retirement, 41 per cent felt it was not enough while 42 per cent said it was enough to see them through retirement, though one out of every three respondents still felt apprehensions.

The apprehension level was significantly higher in Delhi compared with Mumbai and Bangalore. The remaining 16 per cent said the amount is more than sufficient.

Of the 300 respondents, 9 per cent desired to retire before 50, around 24 per cent did not wish to retire and 54 per cent wanted to retire before 60.

While in Mumbai and Delhi, two out of every three people said they would continue to lead an active life after retirement, it was different in Bangalore with two-thirds of the people saying they would prefer to lead a relaxed life after retirement.

When the term investment is concerned, people genuinely think of investing in various investment markets like Shares, Stocks, Bonds, Forex, Mutual funds and many more financial markets. The very first thing that an investor does is to pay some amount of money to start on with the investment. And after that he has to keep on worrying about it. In this scenario an investor is not assured that he will earn the positive earning.

Therefore it is better to invest in insurance, according to me...

What are your views regarding this...