Why You Need to Insure Before Invest?

Insurance in plain terms means protection from future losses. The losses could be anything, property, money, health or even life. You might think holding enough money in your bank account or investing in properties like real estate, jewels, bonds and share may provide enough protection for the future, but these instruments are not steady. They are volatile in the sense you can dispose of them anytime when you want to and your dependency on them as a backup goes off just like that, in a flash.

True, you won’t get any monthly or yearly dividends out of insurance policies (Except one or two like whole life & universal life) like you get from your investments. But this dedicated financial product puts you, your loved ones and your hard-earned properties in a safety bubble and you can rest easy for the rest of your life.

Importance of Insurance

Here’s a list of reasons why you should insure first before you invest,

1. Insurance provides Security & Assurance

When it comes to both life insurance and non-life insurance, they provide a sense of security that no other investment would bring you. You are always relieved that a dedicated option lies by your side in case anything goes wrong.

Why you need to invest

2. Insurance is Another Form of Investment

When you calculate the amount of principal you need to pay regularly for an insurance plan, and you look up at the amount you receive when the policy matures, you realize you have a decent amount waiting for you at different stages of the policy period. In life insurance policies, since the policy periods amounts to a several years, this works incredibly well. The return on investment is good and comparable with other investments.

3. Insurance Policies are Great Savings Tools

The lock in period of the policies ensure that you don’t take up money from this account and spend it at will. True, you can apply a loan over it, but you will have to make it up with interest. With your investments, you have the liberty to mortgage or even sell them (sometimes lower than the market price) when your hands are tied. This puts you at a loss when compared with your insurance policies.

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4. Insurance has a Diverse Set of Options Available

The Life insurance has term policies and permanent policies. Non-life insurance covers a lot of options like, Auto insurance, Property insurance, Health insurance, Accident insurance, Travel insurance, Disaster insurance, Credit insurance, Mortgage insurance etc.  The minimum requirement of policies for any individual are, a permanent life insurance plan, a health insurance plan, an automobile insurance plan and a disability coverage plan. You can invest in properties without any worries after you acquire these basic necessities.

5. Most times, Insurance is Tax free

Unlike your investments, your insurance policies attract very little or zero tax. You need to check with your policy advisor about the plan. Your investments on the other hand, demand taxes with time. The costlier the investment, the more the taxes.

6. Insurance is a Worry Free Option

Investments demand attention, refurbishment and upgradation while your insurance plan doesn’t need them. All you need to do is check if you have paid the monthly premium and your money is safe until it matures. Once the policy period is over, you can use the money to invest further too.

Want to Know More about Insurance?

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