Why you should never buy insurance just for tax saving

financialexpress.com:

Financial planning has become crucial in today’s times to protect and secure our family’s financial well-being. And one crucial aspect of financial planning is opting for insurance. Most people, however, often think that insurance only serves the purpose of tax saving, and they should consider the tax angle first before selecting a policy, but that is not how it works.

It is crucial to understand that the purpose of insurance extends far beyond just tax saving. That is why investing in insurance solely for tax-saving purposes may not be a wise decision.

Insurance plays a pivotal role in providing financial security and peace of mind to individuals and their families. It serves as a shield against various risks, including health emergencies, accidents, disabilities, and untimely demise. By paying a premium, policyholders transfer the financial risk to the insurance company,

For example, life insurance ensures that your family members are financially protected in case of untimely death of the insured person. It provides a lump sum amount, known as the death benefit, to the nominee, which can help cover living expenses, outstanding debts, children’s education, and other financial obligations. Similarly, health insurance safeguards against exorbitant medical expenses. It provides coverage for critical illnesses depending on the policy terms and conditions.

Also Read: Planning to surrender your life insurance? Know the costs first

It is important to evaluate your financial goals, liabilities, dependents, and lifestyle to determine the type and amount of coverage you require. You can assess the cost of your health treatment based on your income and treatment you may need in future. You must compare insurance policies offered