This umbrella is for all season

By: hirannya | Tags: Financial Planning | Comments: 0

Wherever you are, you surely experience monsoon at some time or otherin the year. During monsoon we never forget to carry an umbrella whenever we go out somewhere (We may forget to bring it back thoughJ). The good old umbrella will protect us from untimely showers, will keep us neat enough to carry on our tasks, will help us to keep promises that we have made – even when mother-nature tries to play spoilsport.

Similarly we need to carry an umbrella throughout our lifetime to protect us and our families,financially from unpredictable events and mishaps. This umbrella will also help us to keep our promises that we all make to our family members (often silent but bold enough). Our life can remain on track, even when luck is not in our side – thanks to this umbrella!

Bitter Truths:

1. Man is mortal. Yes, we will die one day. When, nobody knows. An untimely death can leave the family in lurch.
2. Life is unpredictable. We may face an accident – minor or major – anytime, anywhere. Apart from physical pain, financially also it hurts.
3. We may get diagnose with some critical illness at some point in our life. We may still survive, but there could be long term treatment. Thus, it can create a big hole in our pockets.
4. We all know the virtue of spiritualism. But can we live the life of a saint? No. Hence we often find ourselves surrounded by expensive goods, gadgets, artifacts and jewelry. An act of robbery or an electric short circuit can then suddenly take us to Stone Age. So all our belongings as well as our “home, sweet home” are under risk –whether man-made events or natural calamities (earthquake, flood etc.).
5. We may lose jobs. Pink slip, pay cut, trimming workforce – these words are not from Mars!

Better Solutions:

1. If you are married or if someone is/are financially dependent on you, consider taking life insurance – immediately. Remember it should be pure term policy only – online or offline, whatever you are comfortable with.
2. Taking a standalone health insurance policy (popularly known as mediclaim) over and above the one which is provided by your employer is always a wise thing to do.
3. While taking a pure term policy you should also opt for a ‘critical illness’ rider. This will come cheap. You may even consider taking a separate critical illness insurance policy altogether.
4. Home, in most cases the biggest investment we make in our lifetime or the most critical asset we ever possess. A home insurance is thus necessary but often sidelined by most of us. A comprehensive home insurance policy canalso take care of its belongings.
5. Contingency or an emergency fund should always be there. Take no chance here. This will always come handy when unpredictability strikes our life – whether it is losing our job or meeting an accident or anything you cannot think of now.

Must not forget:

1. The life insurance cover should take into account your family’s lifestyle expenses, outstanding liabilities, priority financial goals of your family members, without fail.
2. While taking a mediclaim, remember, that your lifestyle, your location and standards of nearby hospitals / nursing homes should also matter in choosing the cover amount as well as the service provider.
3. Before applying for a home insurance cover first checkout with your society members whether a full building coverage is already taken or not; also check your loan papers to find out whether you yourself had bought one while taking the home loan.
4. Your contingency fund should take care of your 6 months’ expenses at least, including EMI and premium outgo. Also make provision there for emergency medical expenses. Remember, your emergency fund should always enjoy maximum liquidity, so that you can access it even in midnight.

So, you see, whether it is raining or not, this umbrella is always useful and critical. Make sure – your umbrella is big enough to not land you in any awkward situation.