OneInsure Blog
Post By Mariya Panwala
Insurance – The Foundation of an Indian’s Financial Planning
Comments
Financial Planning in India, Financial Strategies
Traditional Indian culture has taught us to save a little part of our income regularly to secure an uncertain financial future. Be it gold or fixed deposit, we have evolved as experts when it comes to parking our money in low-risk investment options. And when the time comes, say when a family member is hospitalized, these small investments come to our rescue.
However, a single unfortunate event like hospitalization has the potential to exhaust all the savings of an average Indian household. And then, it needs to start saving again to be prepared for another such event. This cycle continues.
By the time a middle-class Indian individual touches the 60s, all savings have been used up for major life events, such as children’s education, children’s marriage, family vacation, emergencies, and so on. The post-retirement life of an average Indian individual is thus spent performing menial tasks to earn income to survive on rather than spent in relaxation, learning new hobbies, or touring the world, which is truly unfortunate.
A middle-class Indian individual needs more than just savings in low-risk investment options, which are neither lucrative (difficult to help you fulfill long-term financial goals) and nor do they create compulsion. In the absence of an emergency fund, it is easy to break into them when a financial emergency strikes.
Financial experts, therefore, suggest that a middle-class Indian individual create a number of small emergency funds to take care of different kinds of emergencies in order to avoid break-ins into investment plans. Insurance acts as a great financial tool in this regard.
For example, opting for a health insurance policy means you need not worry about the expenses that will be incurred while receiving medical treatment. Critical illness insurance gives you a lump sum amount to take care of the treatment cost if you’re diagnosed with a life-threatening illness. A travel insurance policy can be sought to prevent a possible financial crunch resulting from undesirable travel events, such as loss of passport/baggage, medical emergency, and flight delay or cancellation.
Further, term insurance, which provides a life cover in the event of death, is the most important type of insurance policy that every Indian individual must have to secure the family’s financial future. Besides, the premiums under term insurance are nominal while the cover amount is comparatively huge.
However, if you’re looking to fulfill long-term financial goals along with life protection, then you can go with an endowment plan, which not only covers you for unfortunate events like death but also provides you a maturity benefit to lead a peaceful retired life.
Insurance is that cornerstone of an Indian’s financial planning which helps him realize both short- and long-term financial goals while simultaneously ensuring that financial emergencies are taken care of. Therefore, to achieve overall financial fitness, an Indian individual must opt for insurance.
Parting Advice
Insurance is a long-term financial investment, so before subscribing to any particular insurance plan, ensure that you have consulted experts. Write to us at support@oneinsure.com or call 86559-86559 and we will assist you in choosing the right plan.
