Do HNIs Need Health and Life Insurance?

Last Updated: 31 Dec 2024

Life can be equally unpredictable whether you are a high-net-worth individual or an average Joe. You must do the best you can to secure your health and wealth. This is where health and life insurance for HNIs come into the picture.

These plans are so much more than just providing financial relief to the family in times of need. They can also assure you that your family will get by despite your sudden absence.

If you are an HNI without proper life or health insurance, it is time to get one. Still in doubt? Continue reading this blog till the end to understand why.

Who Are High Net-Worth Individuals?

People with liquid assets of more than five lakh rupees always fall under the category of high net-worth individuals. Liquid assets here include every such asset that you can quickly convert into cash and use the funds to meet your financial needs.

This also includes investible assets that exceed a certain threshold, along with fixed-amount savings at the bank or other similar organisations. However, lifestyle assets like cars and houses are not liquid assets since they cannot be converted into cash quickly.

Why Do HNIs Need Health and Life Insurance?

The reasons for getting life and health insurance for HNI are similar to those of an average person. Nonetheless, let’s take a closer look at some of these reasons to understand the logic behind this:

1. Financial Security

Of course, the first and the most apparent reason is financial security. This security is not just for the individual in question but also for their loved ones. Health insurance policies will ensure you can afford proper treatment in case something goes wrong with your health. Similarly, life insurance ensures that your family gets a large payout after your death to maintain the current lifestyle.

2. Security Against Debt and Loans

Another important reason for HNIs to get health and life insurance is that it offers security against debt and loans. HNIs generally take out loans for education or investing in their business ventures while starting their careers. The burden of paying these loans might fall on the shoulders of your loved ones in your absence. With these policies, your family can pay off your debt without dealing with the burden.

3. Impressive Coverage with Affordable Premiums

The next reason to get life insurance as a high net-worth individual is large coverage. In general, these insurance policies do not require high premiums, but the coverage you get is quite impressive. It only makes sense to leverage these policies as they offer better financial security without leaving a hole in your pocket.

4. Better Financial Planning

Planning your finances properly is paramount in today’s volatile world. With insurance policies, you can determine where you have invested your money. This further makes it much easier to plan your finances and better prepare for the future. For instance, you can consider paying these premiums and plan a secure and financially independent retirement.

5. Tax Incentives

No matter how much you earn, it is certain that nobody enjoys paying taxes. This is another area where you can enhance your savings with the right insurance policy. In India, we can claim these benefits under sections 80D, 80C, and 10(10D) of the Income Tax Act 1961. This is something you must consider if you are an HNI without insurance.

Bottom Line

There is no denying that wealth provides a certain degree of financial stability. But you still need to practice caution since there is still room for things to go wrong. This is why every HNI must get health and life insurance to prepare themselves better. This will enhance your financial planning and get you tax benefits and other relevant perks.