Financial Protection:
Insurance provides a safety net against unexpected events like accidents, illnesses, natural disasters, or death.
It helps reduce the financial burden on individuals and families during tough times.
Peace of Mind:
Knowing you are covered gives mental relief. You don’t have to worry as much about "what if" situations.
For example, with health insurance, you don’t have to panic about large hospital bills.
Support for Family:
In life insurance, if the policyholder passes away, the nominee (usually a family member) receives a payout.
This helps the family stay financially stable even in the absence of the main earning member.
Legal Requirement:
Some types of insurance, like motor insurance, are mandatory by law in India.
Driving without at least third-party insurance can lead to penalties.
Helps with Long-Term Goals:
Some insurance products (like endowment or ULIPs) combine protection with savings or investment.
They help build a corpus for goals like children’s education or retirement.
Business and Property Protection:
Businesses insure their assets, employees, and operations to avoid heavy losses in case of theft, fire, or lawsuits.
Individuals insure homes and valuables for protection against fire, burglary, etc.
Tax Benefits:
Premiums paid for certain insurance policies (like life and health) qualify for tax deductions under Section 80C and 80D of the Income Tax Act.
