scorecardresearchWhy your financial planning is incomplete without insurance

Why your financial planning is incomplete without insurance

Updated: 06 Jan 2023, 08:01 AM IST

The unpredictability of life underlines the importance of having insurance in today’s times. Without adequate life and health insurance coverage, ensuring financial security for your loved ones is not possible.

Your financial planning is incomplete without insurance

Your financial planning is incomplete without insurance

Life is full of surprises, both the good and the bad ones. Some bad ones, however, can be traumatic and take a toll on your health or affect your family. Financial security, thus, becomes necessary. Despite this, many don't pay heed to insurance.

Realising the importance of insurance 

Death and taxes are certain. While we do discuss savings, investments and taxes enough, discussing death is a taboo in Indian families. Let's face it - death can occur unexpectedly. While we can't control these events in our lives, we can certainly do our bit to secure our families financially.  

Ensuring financial security

Life insurance can serve as a shield that protects your loved ones who are financially dependent on your income and ensures they will be taken care of in the event of your premature death. You may view buying life insurance as an act of showing love to your family. The life insurance coverage amount can help mitigate the effects of life’s unpredictability as well as rising inflation rate.

A health insurance policy ensures that you do not have to spend your money on hospitalisation and subsequent treatment. Cashless health cover enables people to be hospitalised and treated with the health insurance company taking care of the majority of the expenses. A critical illness cover ensures that your family gets the predetermined amount in hand on diagnosis without worrying about where and how to get treatment. 

Transfer of risk

Buying insurance is about managing unwarranted and unwanted risks. The insurance contract operates on the “principle of financial risk transfer from the insured to the company”. The insured pays premiums to receive compensation from the insurer to come to terms with the effect of an unforeseen event. Having insurance, therefore, lessens the financial burden on one’s shoulders.

Extensive protection

There is no way you can compromise on your family’s security. Irrespective of the number and kind of investment opportunities you put your money in, nothing can secure you more than an insurance policy that shows its efficiency at a time when you need money the most. Your most valuable asset is your family, and they rely on you for financial support. As a result, it is critical that you and your family are fully prepared to deal with any emergency.

Peace of mind

Health insurance provides you with both financial security as well as peace of mind. Having insurance ensures that you are protected against any unforeseen events in life, providing complete peace of mind.

The sum of these reasons is sufficient to warrant the need to purchase insurance.

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First Published: 06 Jan 2023, 08:01 AM IST