Insurance is Seen By A Large Portion Of Us As a Way Of Tax Relief And As A Way Of Saving. It Is Almost Never Seen As A Way To Manage Financial Risk
Almost all surveys say that West Bengal is first in the race to buy insurance. But at the same time, the Survey Says That The People Of West Bengal are far Behind In Knowing About Insurance. When We Go To Buy something, be it a potato or a TV, we try to find out how much it costs and why. We need not match with that. even if we have money in our pocket, we Definitely Don’t Buy A 52 Inch TV for a Single Room. But when buying Insurance, We Don’t Really Check What Other Insurances Are Available In The Market. Or How Much Of What We Buy is What We Need.
Insurance is Seen By A Large Portion Of Us As a Way Of Tax Relief And As A Way Of Saving. Financial Risk Is Almost Never Seen As A Way to Manage It. But Seeing It As A Way to Save, Many Of Us Avoid Its Complications And Hand Ourselves Over Directly to The Agent. But Understanding Some Common Differences Will Help You Make A Decision.
For Example, This Is The Difference Between Linked And Non-linked. Although it sounds very difficult, it is Not So Difficult At All. At least Understanding The Basics Of Division Makes The Rest Much Easier. So let’s Take A Look At The Difference.
Linked plans are those insurances that Are Seen As Investment Insurance. Remember, investing is when your Money Is Usually Poured Into The stock Market Or The Bond Market. In this Type Of Insurance, Your Insurance Premium Is Kept Aside And The Remaining Amount Is Invested In the market. For example, ULIP. Hence, this Type Of Insurance Is Called A ‘Linked’ Policy As The Fluctuation Of The Deposit is Linked To The Market Risk.
Non-linked Plans Are Traditional Insurance. Its Money Is Not Invested In The Market. In This Insurance, You can Roughly Predict How Much Money you Can Get At The End Of The Insurance Period. A Pre-determined Amount Of Money You Can Get After The Maturity or Insurance Period Is Passed. Added to That Is The Amount Of Bonus Declared every year.
That’s it! Now you know what can be The Main Division Of Insurance If You Look At It As Savings. When You Walk Down The Path Of Buying New Insurance, Proceed With An Understanding Of How Much Risk you Are Taking On Investing Your Money.