Some people may self-insure by setting aside a certain amount of money each month in a savings account or emergency fund to cover unexpected expenses. This can be a viable option for people who have a stable income and can afford to save regularly.
It's not necessarily true that individuals always try to replace insurance. In fact, insurance can be an essential part of financial planning and risk management, and many people recognise the value of having insurance coverage in case of unfortunate events such as accidents, illnesses, or natural disasters.
Insurance and investment are both important aspects of financial planning and should be considered together to create a well-rounded financial plan.
Here are some reasons why insurance is necessary along with investment:
Lifestyle diseases are on the rise, particularly among people under 45. Diabetes, obesity, respiratory problems, and heart disease, all common in older people, are now common in younger people as well. Sedentary lifestyles, stress, pollution, unhealthy eating habits, gadget addiction, and unstructured lives are all risk factors for these diseases.
While taking precautionary measures can help combat and manage these diseases, an unfortunate incident can be financially difficult to deal with. Investments can help you in gaining decent returns according to the market fluctuations, which might not get the required amount of money for health purposes. There is not an issue like that in the case of insurance.
When looking for the best health insurance policy, you can choose to cover your entire family under one policy rather than purchasing separate policies. Consider your elderly parents, who are prone to illness, and your dependent children. If you have adequate health insurance, you will not have to worry about ensuring that they receive the best medical treatment possible. Thoroughly research, consult experts for an unbiased opinion and ensure you get a plan that provides coverage.
There are numerous advantages to purchasing health insurance early in life. Because you are young and healthy, you can get insurance at a lower cost, and the benefit will last as you age. You will also be presented with more comprehensive coverage options. Most policies have a pre-existing condition waiting period that prevents coverage for pre-existing conditions. This period will come to an end while you are still young and healthy, giving you the benefit of comprehensive coverage that will come in handy if you become ill later in life.
The right insurance policy can provide financial stability and protect you and your family from unexpected events that could result in financial loss. While investing is important for building wealth, it's also important to have insurance coverage in place to protect that wealth and provide a safety net in case of emergencies.
Insurance and investment are both important aspects of financial planning and should be considered together to create a comprehensive financial plan that meets your needs and goals.
Investing and insurance products should be viewed as long-term planning tools, and a balanced portfolio can help you achieve your financial goals. By having a mix of investments that include stocks, bonds, other assets, and insurance products that provide protection, you can ensure that your portfolio is well-rounded and well-suited to your needs.
In summary, a balanced portfolio of investment and insurance protection is essential for any prudent financial planning strategy. It provides diversification and protection and helps you achieve your long-term financial goals.
09/03/2023, Live Mint