Kotak Life

Buy a Life Insurance Plan in a few clicks


Now you can buy life insurance plan online.

Kotak e-Term Plan

Kotak e-Term Plan provides a high level of protection to your loved ones in your absence. Know more

Kotak Guaranteed Savings Plan

Kotak Guaranteed Savings Plan is a savings and protection plan that helps you achieve long-term financial goals and provides an insurance cover against any eventuality. Know more

Kotak E-Invest

Kotak e-Invest plan is a complete Unit-Linked Insurance Plan that can be customized as per your goals and needs. Know more

Kotak Health Shield

Kotak Health Shield Plan helps secure your finances in sudden medical expenses such as Cardiac, Liver, Neuro, and Cancer (all early and significant illness stages/conditions of cancer), along with offering protection for personal accidents - in case of accidental death or disability. Know more

Kotak Lifetime Income Plan

Kotak Lifetime Income Plan gives you the security of your income continuing throughout your life and in your absence throughout your spouse's lifetime! Know more

Is Life Insurance an Investment?

Is Life Insurance an Investment?
  • 25th Oct 2021 |
  • 772

In India, most people have this misconception that financial planning is all about investments. However, the truth is financial planning is a much broader concept. It involves several aspects of money management like budgeting, dues and liabilities, credit management, tax planning, and insurance and investments.

Insurance and investment are the most important bricks that form the foundation of a sound financial plan. Insurance and investments are entirely different financial products, and they serve different purposes. Hence, you must not consider insurance as an investment.

When you buy a life insurance policy, you essentially purchase financial protection for your family against future uncertainties that can adversely impact your finances. Although no amount of compensation can replace the loss of human life, an insurance plan can help you mitigate the financial impact it can have on your family in the event of your sudden demise.

No matter the type of life insurance you buy, be it a term plan or any other plan, you must pay the premium to the insurance company. In return, the insurer agrees to pay the policy benefits, i.e., the sum assured to your family members in the event of your unfortunate demise. In a nutshell, the insurance policy acts as an income replacement for your family in your absence.

Why Insurance is not an investment?

In simple terms, an investment is a financial product that helps you generate wealth in the long run and build a corpus. You can invest in different products based on your understanding of the product, returns expectations, risk-taking ability, and financial goals.

You can invest in multiple products simultaneously to diversify your portfolio and mitigate the risk potential. Based on the investment you choose, you can get periodic returns, as applicable with fixed income schemes like bank fixed deposits.

While some insurance policies like the ULIP (Unit Linked Policies) and Retirement Plans have savings and investment components, the returns offered are incomparable to pure investment plans like mutual funds. Also, if you hold a term insurance policy, you do not get any returns, either on the survival of the policy term or during the policy tenure.

The main purpose of an insurance policy is to provide your family with financial protection against uncertainties of life and not to help you accumulate mass wealth and become rich. It only ensures that your dependent family don’t face any financial hassles when you are no more.

Why do people confuse insurance for investment?

One of the significant reasons people consider insurance as an investment is inadequate financial knowledge about insurance and investment products. Also, with the growing popularity of the new-age hybrid insurance-cum-investment products such as ULIPs, money back plans, people believe insurance is an excellent investment avenue.

However, you must know such policies fail on both fronts. Neither do they deliver substantial returns, nor do they provide adequate insurance cover.

What should you do?

The premium for the hybrid insurance policies is generally much higher than the pure protection plans like term insurance. So, many experts recommend purchasing term insurance with high coverage to meet the family’s future needs. And for investment purposes, it is better to choose a pure investment plan.

Make sure that you choose your investments carefully based on your long-term and short-term goals, risks involved, etc. Also, you must monitor your investments regularly and take necessary corrective actions when needed.

- A Consumer Education Initiative series by Kotak Life

Similar Articles

What is a short term insurance policy?

8 Benefits of Term Insurance You Should Know

What Should You opt for - Limited or Premium Pay?

Term Plans are Definitely Cheaper than You Think!

Cost of Term Insurance Likely to Increase Soon

Can I Get Term Insurance on Behalf of My Spouse?

Understanding Term Insurance Riders

5 Benefits of Early Retirement Planning

Is It Good To Buy A Term Insurance Plan In 2022?

Can Non-Resident Indians (NRIs) Buy Term Insurance In India?

Know How to Invest at Every Age for Larger Returns

Term Insurance With Riders In India

What is Critical Illness Policy

When is the Right Time to Buy Term Life Insurance Policy for Yourself?

Planning For Son or Daughter's Wedding

Which Term Insurance to Choose: Lump Sum or Staggered Pay-out Plan?

Why does every working woman need life insurance?

Can I Extend the Tenure of My Term Insurance Plan?

टर्म इंश्योरेंस क्या है? टर्म इंश्योरेंस का मतलब

What Should Be The Duration Of Your Term Plan in India?

Which Death Type Does Your Term Plan Not Cover?

Reasons You Need Term Insurance Plan as a Self-Employed Person

Insuring Against Disability With Disability Insurance Rider

5 Term Insurance Benefits for Single Women

What Is a Passive Income? Why Should You Use It to Buy a Term Plan?

How To Change The Nominee in Term Insurance?

How To Choose the Right Sum Assured Under a Term Plan?

Online vs Offline Term Insurance: Which Is The Better Option To Buy

What All Documents Required For Term Insurance In India?

Planning For Children's Future

What is a Joint Term Insurance Plan? Key Benefits of Joint Term Plan

Why Buy Term Insurance Even at Rising Rates?

How To Calculate The Amount Of Term Life Insurance You Need?

Advantages of Buying Term Insurance in Your 50s

Busting Myths and Facts About Term Insurance Policies

Choosing Riders for Insurance Plans

Do I Need to Give a Medical Test for Term Insurance in India?

Does Term Insurance Cover Accidental Death?

What is the Right Term Period For Term Insurance Policy? Here's How You Should Choose!

Tips to Choose the Right Term Period for Term Insurance Plan

Make Your Online Term Plan Your Family's Monthly Pay Cheque

What Are the Best Term Insurance Plans for Planning Retirement?

Is Term Life Insurance Plan an Investment or Expense?

8 Things To Do After Buying Term Insurance

Insurance Policy for Housewife In India

What Is a Renewable Term Insurance Policy?

Advantages & Disadvantages of Term Insurance in India

Gift Your Father A Term Insurance Plan This Father's Day

Should Youngsters, Working Couples Buy Term Insurance Plans?

Different Types of Protection Plans

What is Term Insurance - A Complete Guide

Why Term Plan Should Be The First Step To Securing Your Future?

9 Ways to Help Family Members in Financial Trouble

Increasing Term Insurance and Riders

Term Vs. Whole Life Insurance: Which One You Should Buy in India?

While Buying Term Insurance Compare Features, Not Just Premiums

Term Insurance: Smokers vs Non-Smokers

How Does Term Life Insurance Work? Learn the Benefits

6 Reasons That Make Term Insurance a Must Buy

Can I Buy Term Insurance for a COVID-19 Patient?

Endowment Plans vs Term Plans: Understanding the difference

Calculating Term Insurance Premium

Can You Increase Your Term Insurance Cover?

Term Insurance with Critical Illness

What is Insurance Premium - A Detailed Guide

Can I Make Changes to My Term Insurance Policy Post Purchase?

What Is the Correct Age to Buy Term Insurance?

Insuring yourself against Ill Health with a Critical Illness Rider

Can A Housewife Buy a Term Insurance Plan - All You Need to Know

Different Types of Premium in Term Insurance

Why Term Insurance Is Important in times of COVID-19?

Why Should You Add a Rider to a Term Insurance Plan?

Protection for your family

Should You Have Multiple Term Life Insurance Policies?

Is it a Good Time to Buy Term Insurance During the COVID-19 Pandemic?

Can Senior Citizens Avail Term Insurance?

Why 1 Cr Term Plan Is Necessary For Family?

What Happens if you Hide Facts in your Term Insurance?

Top 3 Reasons Why You Should Buy A Term Plan Now

Why Should You Buy Term Insurance in 2022?

Buying A Term Insurance Plan? Take These Factors into Account

All you need to Know about Term Insurance Plans for Housewives

How Does A Term Life Insurance Work in India?

Buying A Term Insurance? Don't Ignore the Claims Settlement Ratio

Everything About Claim Settlement Ratio for Term Insurance

What are the Documents Required for Term Insurance Plan?

Why Married People Should Buy Term Insurance Under MWP Act?

Importance of Term Insurance at Every Stage of Your Life

Term Insurance Plans and Policies for Smokers

10-Year Term Life Insurance Policy - Explained in Detail

Difference between Term Insurance and Life Insurance

Is ₹1 Crore Term Insurance Good Enough Cover?

Best Investment Plans for Children - Secure Your Child's Future

Is a Term Insurance Policy Portable?

5 Reasons to Buy Term Insurance When You are in Your 30s

Ideal Features of a Suitable Term Plan - Act Now for a Stress-free Future

Is Life Insurance Investment Worthy Enough

Do Beneficiaries Pay Taxes on Term Insurance?

5 Things To Consider While Buying Term Insurance Plan

Term Insurance Age Limit – Term Plan for All Age Groups

Is Group Term Life Insurance Provided By Employer Sufficient?

What Types of Deaths Are Covered in a Term Insurance Plan?

8 Factors to consider before choosing a Critical Illness Insurance

Eligibility Criteria for Buying Term Insurance in India

Should You Buy a Term Plan After 40?

Term Life Insurance Plan for Smokers vs Non-Smokers

6 Types of Death not covered in Term Insurance Plan

Term Insurance: What Happens When You Don’t Pay Your Premiums?

Does Your Term Insurance Plan Cover Death Due to COVID-19?

Why should single women purchase term life insurance?

Tax Benefits of Term Insurance in India

How Much Term Insurance Do I Need

Term Plan with Spouse Cover

What are incremental term insurance plans?

Is There Any Tax Benefit on Term Insurance?

4 Things To Expect From Your Term Insurance Plan in India

How To Choose the Right Term Insurance Plan?

What is Form 16, Form 16 part A, Form 16 part B, Information Required and FAQs

Is term Insurance Needed for People With No Dependents?

How to Compare Term Insurance Online

Ensure Protection Against Death, Disease & Disability With Life Insurance

Why Term Insurance Is Better Than ULIP?

Why Should New Parents Buy Term Life Insurance?

What Are Insurance Riders and How to Choose Them in a Term Plan?

Insuring Against Accidents with an Accidental Death Insurance Rider

9 Most Frequently Asked Questions on Term Insurance

Why Should You Not Take A Term Plan Without Medical Test in India?

Comparing Term Plans – What Should You Look Out For

Why is it important to buy term insurance plan?

Are The Add-ons and Optional Features of Term Insurance Plans Actually Beneficial?

How Much Cover Should I Take In A Term Plan?

How to Surrender Term Life Insurance When you have No Liabilities

Insuring Protection Against Death With Death Insurance Rider

Term Insurance Basics You Should Know

Term Insurance – Why You Must Include In Your Financial Planning?

Why Buying a Term Plan Is Smarter Than Traditional Life Insurance Products

Key IRDAI Regulations That Changed Face Of Term Insurance Industry In 2020

How Not To Get Your Term Insurance Claim Rejected

4 Reasons Why You Need Critical Illness Cover

Make Your Online Term Plan Your Familys Monthly Payout

Why Premium Amount for Term Insurance is So Low?

Key Differences Between Term Insurance, ULIPs, And Health Insurance

How Much Term Life Insurance Cover Do I Need in India?

Do You Need Term Insurance Cover After Retirement?

Why Buy Term Insurance Plan With a High Cover?

Can Term Insurance Plans Be Purchased As A Gift?

How to Ensure That Your Term Insurance Claims Are Never Rejected?

How to Buy 1 Crore Life Insurance Policy Without Medical Test

Individual Life Insurance vs. Group Term Life Insurance

How to Identify Term Insurance According to Your Needs?

Term Insurance Calculator - Everythng You Need To Know

Term Insurance: Most Common Term Insurance Myths Explained | Kotak Life

All About Term Insurance Inbuilt Coverage

Why Surrendering Your Term Plan Policy In The Final Phase Maybe A Bad Idea?

Steps on How to Buy Term Insurance Online

What Happens to Term Insurance Plan With No Beneficiary - Kotak Life

4 Methods to Calculate How Much Term Insurance You Need