Insurance planning is a key instrument used for managing risk..It means covering the insurable risks of an individual's life, health, car, home and many others. It requires expertise to recognize the risks faced by an individual and then take the required risk mitigant.
Insurance planning is essential, as it helps one to identify the risks and getting them covered, by investing into various tools that may provide a protective shell to a persons life, health, car, house and many such assets. It can broadly be categorized into :
- Life Insurance
- General Insurance
Life Insurance, as the term suggests covers an individuals risk over life. Under a life insurance policy a person can be covered for death, disability or serious illness. It is beneficial for the family of the insured after his/her death as the family receives a large amount of money which can support them.
General Insurance, on the other hand covers everything other than human life. It broadly covers health, motor, marine, travel, household and many more.
Insurance planning helps an individual to lead a stress free life keeping him sure about his life and assets.
Benefits of Insurance Planning Insurance planning is the most important step towards financial planning. It provides security to an individual by covering his life and other assets. Following are the benefits of Insurance planning:
- Provides financial security of life and assets:- Well planned insurances provide an individual with the financial security that is required. This keeps him tension free during his course of life and even after he is gone.
- Many life insurance schemes are designed to minimise the tax incidence and maximise the returns.
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