5 min read
Updated on Nov 25, 2022
Insurance has many extensive usages and benefits than just serving the purpose of a tax saving device. Are you looking at insurance just for the sake of saving tax? If so, read on to know its other benefits. Savings and investments are two things that everyone does in his/her own way and as per his/her own capacity. But after saving your hard earned money for years together, if you had to lose it because of an untoward or unforeseen situation, it is the most unfortunate thing. And it does happen, especially if there is a sudden condition of severe health in the family or an accident etc.
So, during such times, what comes to your rescue is insurance. If you have proper insurance coverage, you can be sure to avoid giving your savings away for such unfortunate life events.
For instance, take the case of Mr. Suresh Prabhu, who has worked hard throughout life to save enough for his retired life so that he and his wife can survive independently. Since his children are already settled, he has no worries to take care of them anymore. However, a sudden illness that required him a huge amount of 4 lakhs for treatment made him realize that he is going to lose all his savings in one go. Now, he started worrying about his and his wife’s future. Thankfully, his son had health insurance offered by his employer and he used it to get the treatment done. So, Mr. Prabhu was relieved as the medical insurance took care of the treatment including pre and post hospitalization costs and other charges.
However, many people who do not have insurance cover are not so fortunate and had to lose their savings altogether. This is because people do not buy insurance to cover their health and other needs. In fact, they see insurance as a mere tax savings tool. Though insurance allows policyholders to save tax under section 80C and 80D of Income Tax Act, it also holds many other significant benefits along with saving tax, which we are going to discuss in this post.
Read More: 5 Tax Saving Investment Alternatives for Indian Citizens
To Sum Up
So, as discussed above it is a fallacy to look at insurance as a tax saving tool. Insurance is a subject matter that is dynamic and it allows varied coverage and serves the insured as a savings tool and supplement their income. Hence, planning insurance from a young age is a good idea. However, it is equally important to do proper research and compare policies before investing.
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