scorecardresearchHaven't invested in insurance? Why you must in the coming year

Haven't invested in insurance? Why you must in the coming year

Updated: 01 Jan 2023, 10:18 AM IST

Investing money is common. The idea must be to protect and secure. This coming year, focus on buying insurance if you have none.

This year, focus on securing your family's future with the right insurance plan.

This year, focus on securing your family's future with the right insurance plan.

We can achieve so much by simply paying attention to our financial habits. However, your financial habits must not be limited to investing in the stock market and mutual funds alone. With growth, you must focus on security too, thus, mandating the need to buy insurance. What use is money if you have failed to secure the financial future of your loved ones? To start with, you must aim for an adequate life insurance plan followed by health insurance coverage that would be enough to pay for hospitalisation and medical bills when needed. 

This coming year, assess the debt and liabilities in your name. Then, check how much is still left to achieve your financial goals, viz., children’s higher education, marriage and post-retirement expenses. Now juxtapose this amount with the current and future value of your assets. A detailed evaluation of all these will help you determine the life insurance coverage that you must opt for. If you find it difficult to calculate the coverage amount, just multiply your yearly income by 10 to get the estimated figure.

Inflation has had a great impact on the amount we spend on treatment every year. This explains the rising costs of hospitalisation and medical treatment. Ensure to buy a health insurance policy that promises enough coverage at lower premium charges. Make sure to buy health coverage equivalent to at least 50 percent of your annual income. In case your family members are more susceptible to suffering from critical illnesses and need frequent hospitalisation, opt for a higher cover. Apart, you may go for a top-up health insurance policy too that redeems in part the bills remaining unpaid by your existing health policy. Go through details regarding riders in your health plan. Alternatively, you may also choose to buy a critical illness cover that will pay you in a lump sum the predetermined amount unbiased of what your treatment would cost. 

There are family health covers that suit best those with aged parents in their families. Health insurance for seniors may be costly and inadequate considering their vulnerability to falling ill and being hospitalised more than others. A group health insurance plan works best in this case as it extends coverage to the entire family, thus, serving everyone’s health insurance needs. 

Insurance is an important part of financial planning though determining the right insurance coverage can be challenging. However, working on a budget that excludes insurance not only makes it incomplete but also reduces your chances of promising financial independence to your family in the long run. 

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First Published: 01 Jan 2023, 10:18 AM IST