There’s so much of bad mouthing on insurance of any kind. I have consistently maintained that you should be adequately covered.
The situation is so bad that even my insurance advisor was suggesting me a term plan when I was evaluating a whole life policy.
In my opinion, term policies are a low value method to cover risk and should be used as a primary method of insurance, especially when you are very young and starting on your life journey.
On the other hand whole life policies not only give you tax free returns while you’re alive – in India at least – they also ensure that your family gets a good coverage. In addition on these policies you can take a loan at much lower interest rates. A term policy will not allow these benefits.
So you’re getting a tax break for investing in insurance, you get a tax free amount after a certain period, your family is also protected and you can also take low interest rate loans.
The biggest thing is that you are ensuring that you are adequately mitigating risk and also ensuring predictable cashflow in the future.
When I was young I used to think of the insurance amount as a burden, but as I have grown older, I have realized its value more and more.
Till next time then.