Financial Ensurance is the key...

Financial Ensurance is the key....

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Feedback can be sent to mailfpc@ yahoo.com)

Ensuring your and your family's financial future is paramount in today's dynamic world. Insuring the precious life is the key to the financial ensurance. Though human life is invaluable, for practical reasons, its better to value the life. And life insurance is a great tool to do that. 

The fundamental objective of taking a life insurance is to compensate our family/dependents on our absence. In essence it assesses the individual's worth and what would the family deserve in one's absence.

Our lifestyle has undergone massive changes both in positive and negative ways. On the positive side, our income levels have gone up. On the negative side, the work stress and work related mobility is also on the rise giving rise to uncertainty. More so in the current scenario, when the global security risks/threats are also on the rise.

Here is a check list of effective financial ensurance principles:

# Realize that "uncertainty is Certain" in our lives:

In the new age, our jobs and careers have raised our mobility to great proportions. Mobility within the country and outside. Such trends will continue to rise even as our economies are globally integrated and clients are located all over the world. This has also increased our exposure to security risks and security threats which are sweeping the globe in the current scenario. But such a mobile life is unavoidable. But we can be prudent enough to protect our precious lives and give that reassurance to our dear ones. So by insuring well for yourself, you can bring in that element of certainty even during uncertain times.

# Never treat insurance as an expense:

 

 

   

The first and foremost notion people carry is to treat insurance as an expense and as an unwanted outflow from our pocket. Never ever treat insurance as an expense from your side. It is not, for the simple reason that your precious and invaluable life is covered for a large sum for the financial security of your family. Remember, human life is precious and invaluable. But insurance helps to value it for the sake of your family's financial security.

# Never mix insurance and high risk investment (ULIPs) - Hybrid of this kind is a bad idea:

 

  

• The primary objective of the insurance is to insure the lives of the people.
• There are other avenues like mutual funds for investing in equities/stocks.
• It is a bad idea to combine insurance and high risk investment in an insurance policy.
• Keep insurance and risky investments separate.
• Take enough and more insurance cover to ensure your family's future.

# Never underestimate your life's worth: 

YES It's your life, the precious life. Your life is worth more than what you think is. Definitely more... So never underestimate and under-insure your life. Its a bad financial strategy to have a very low cover or at times no cover at all... After all its your life and its about your family's financial security in one's absence. Remember, nothing can prevent a misfortune, but insurance can provide a cover for such a misfortune.


The ideal way to arrive one's insurance cover is -

Your annual salary * 10 times (at least) should be your cover at all times.

Remember it's your life...

# Never buy an insurance just for tax saving purpose:

Saving for taxes is very much a financial priority, but one should not buy an insurance only to fulfill the tax obligations. In the process you end up buying very little insurance for yourself and thereby increase the risk of improper cover. Have a cover commensurate with the current income levels. 

# Buy an insurance which covers you for lifelong:

 





















Buy an insurance which should cover your whole life and not only a part of your life. In essence it means you should have a cover till your survival. Thanks to medical innovations, people live longer compared to the past. And the risk to life is higher at the later stages in life. So consider a life cover till your survival age and not a limited time frame cover.

# Have up to date insurance cover:

People grow quite fast on the career and salary ladders. Its must to upgrade insurance cover commensurate with the current income levels. 

For eg., if A's salary is Rs 5 lacs now. Then cover should be atleast 50 lacs (5lacs *10 times). If the salary moves upto 10 lacs after few years, the cover should also be raised accordingly, in this case 1 crore. So be up to date in your insurance cover.

# Take the insurance cover NOW:

Buy the right insurance cover but buy it right now.. Remember there is a cost of delay due to our age and inflation factors. Taking earlier is not better, it is the best option.

Call the experts NOW @ Money Avenues for the right insurance plans!

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Feedback can be sent to mailfpc@ yahoo.com)

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