We often keep cash in bank as safe to cover short term spending goals or emergencies. However, things get complicated if we are saving the money for long run.
After all, we need to protect ourselves from inflation. And now that the inflation rate is increasing 2% to 3% per year, it can reduce the buying power of Rs. 1000 saved today to the equivalent of about Rs.600 after 20 years.
Let us assume an investor sets aside Rs. 10,000 every month that gives him 10% return on a saving plan. Now after 30 years, his saving will grow to Rs. 2,26,04,879 which is a good sum to meet all the financial requirements at that time. However, when you consider inflation (let’s say 5 %), then over a period of 30 years, the total sum will be halved to Rs.
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1,13, 02,440. So, saving seems to be a better option until the eroding effects of inflation are considered.
So, the first thing we need to do is beat inflation with whatever investment we make. The reason being, if we do not beat the rate of inflation we are actually losing out money, not making money. This is where investment triumphs over saving. While, there are many ways of investments including stocks, buying Insurance is a healthy option for young investors. Insurance is not just affordable but easier to understand and simple to comparison shop.
So the question arises: Is Insurance a Good Investment?
Everybody needs a life insurance if they have family members who depend on them financially. With strict regulatory terms to protect policyholders, most of the insurance policy has lesser risks as compared to other forms of investments.
Another advantage is that the coverage amount of the insurance can be increased over time.
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So, while you can afford only a small insurance premium with your current source of income, over time with increasing income through new income sources or promotions, you can increase your insurance cover by paying slightly higher premiums and provide a better life cover post-retirement.
Moreover, buying insurance when young save thousands of rupees as insurance premiums are considerably lower. In addition, since you avail for insurance before any chronic health (most chronic conditions like cholesterol and blood pressure show up after 30), you pay substantial less in premiums. This is the reason why Insurance is now bought by youngsters in their 20s before they have an inherent need as age and health keep the premium low and gives more time for compounding of money.
Buying Insurance Online: An Easy and Simple Investment Method for the Youngsters
It is always healthier to capitalize your hard earned monthly savings with long-term benefits than to look for short-term paybacks from high-risk investment schemes. Moreover, now that insurance can be bought online, buying insurance is as easy and simple as ordering clothes online. You can compare various packages, offers, and insurance that suits your need perfectly.
An advantage of buying insurance online is that it is quite affordable and not at all expensive. Besides, you can browse a wide range of offers that a company is providing you. For instance, you can get insured for 1 crore cover at as low as Rs. 18/day cost with HDFC Life Insurance. In addition, from inquiry to filling the form and paying premium, everything happens online from the comfort of your home. Yes, #YehBhiOnline – all you need to do is Click To Insure!
You can also calculate your premium and other core figures by using insurance premium calculator.
Besides, there is also post-sales support in the form of policy Tracker and policy servicing.
Check out the TVC by HDFC Life that clears your hesitation and fear of buying insurance online.
So, whether you have just started your career, got married recently or blessed with a baby, securing insurance as an investment can prove as the best investment decision in the long run.
Happy Investing!
