Should We Call Insurance as a Investment?

Many people think of insurance as a waste of money. I used to be one of them, till I met with an accident a couple of year ago, injured myself and was hospitalized for the next 2 weeks. I had to pay a huge bill for hospitalization. I wished that I had insured myself. The first thing that I did after recovering from the injury was to buy an insurance policy. It was then that I started considering an insurance policy as an investment. I know many of you may not agree with me. But if you go through the following points, you would know the importance of insurance.

Most of the young people like me think that they do not need insurance, especially life insurance or health insurance. But they are wrong. The importance of life insurance can be said to be:

• Life insurance is a sort of investment which yields good results. In many countries, those who buy life insurances policies get tax benefits.
• If you happen to invest in this kind of policy when you are in your twenties, you have locked in a lot of money to save for future by the time you are in your thirties. Your policy will mature when you are still in your forties and you can continue this policy for a longer duration. Investing money form an early age ensures that you have accumulated a lot by the time you are ready to retire.
• This is a very safe kind of investment which provides you assured returns when your policy matures. You may not put all your savings in a life insurance, but a part of it and this remains in a very safe haven.
• Life insurance covers risk against death. If the insured dies the dependents get the sum assured, which would provide for the financial loss caused by the death of the insured.

After I had a close brush with death I realized that death is an inevitable part of life and can engulf anyone, anytime, irrespective of their age.

The general insurance too can be considered as a good investment. You will have to look at general insurance from my point of view.

• General insurances covers several things and their loss would create a financial burden on you; be it your home and its contents, your car, or your (and your family's) health.
• Most of the insurers cover risk in case of financial loss due to man made and natural calamities.
• You have peace of mind that you have a safety net to fall on.
• The premiums required to be paid in return for covering these contingencies is something you can afford. But you may not afford the financial loss if you have to face when your car is stolen, or your house is damaged due to natural calamity.

The premiums of a general insurance are like a fixed deposit which yield results only when you have face a financial loss. So investing in an insurance policy is a good investment and I would recommend this as a very useful financial tip to everyone. The contingencies in life never come announced and this is what I realized after recovering from my accident. Although I could not have avoided the accident, I could have had financial support from an insurer if I had an insurance policy to cover me. So all types of insurances provide you with a safety net, which protect you in case you 'fall' financially. So yes, I do opine that we should call insurance an investment.