Importance of Life Insurance 

One of my good friend had a small argument with me, that she would not invest inTerm Plan of Insurance because she will not get any “returns” out of it. I believe investing in a term plan looked a very unprofitable thing to her as she never gets back the money she paid as “premiums” , if she survives.

Endowment plans looked nice to her, because they provide money if you are dead and even if you survive. You get back money as the prize for not dying !!!.

With respect to Term insurance , she understood the fact that her family will get the money from insurance company in case of her death, but she was concentrating on the fact that she would not get back anything if she survives. What is the return in that case? Nothing !!! , and looked like some one isfooling you with a product called “Term Insurance” , where you are “investing” premiums to get nothing at the end.

Let me now tell why this happens and some give you some insight on this matter.

I have already talked earlier in my last post “Life Insurance and how to go about it” , about Term Insurance . Let me now take more deep dive into it and talk about the reasoning part.

I will first talk about fundamentals of Insurance and then talk about Endowment Policies and why are they popular, and what people don’t realise about them. and how Term insurance is the right thing for most of the people.