Why Life and Health Insurance Should Be An Integral Part Of Your Wealth Management Portfolio?

Greetings,

We hope you liked our post on maintaining a balance between health and wealth management and we’ve put it here in case you missed it!

Steve Jobs was famously quoted saying “No one wants to die. Even people who want to go to heaven don’t want to die to get there. And yet, death is the destination we all share. No one has ever escaped it.”


That being said, there’s a certain comfort in the knowledge that no matter what happens, we not only have the means to pay for our medical treatment if required but also the means to provide for our families in the case of any eventuality. If life insurance & health insurance don’t feature on your list of priorities when it comes to building an investment portfolio, you’re not building it on a very strong foundation.


In fact, life and health insurance are the very foundation that the financial pyramid, (explained in our post on building a wealth management portfolio), is built on. This is because safeguarding what you already own, Even if It’s just your own health is more important than creating new wealth. The new disease, in particular, has made it more critical than ever to be well prepared for any unforeseen circumstances.


Life Insurance  


Life insurance comes with a death benefit which is usually in the form of a payment or payments to your next of kin.


As an example, if you take two people with similar wealth portfolios, say 5 crore INR, one with a life insurance cover of 10 crores and the other without any life insurance. In the case of their eventuality, the first person will leave his family with 15 crores, while the second, even though he had a similar portfolio, will leave his family with just the 5 crores. This 5 crores represents all the wealth he has left behind and will be soon spent by the family on regular expenses, kids education, marriage and other miscellaneous expenses. 


In the case of family with 10 crores of life insurance. They will find it lot easier to manage their expenses and will not have to dig into savings, withdraw from investment portfolio or sell any property to continue the same standard of living. As seen in the above example, in addition to a death benefit, a life insurance policy effectively protects your investment portfolio, property, and any other assets you may leave behind. A revisit to our post on human life value will give our readers a quick recap on how to calculate the right amount of life insurance for yourself and your family.


Health Insurance


Health insurance is in place to ensure you’re financially covered in case you need any kind of medical attention. This is equally if not more important than a death benefit, especially with the situation in the world today where hospitals are working at their peak capacity causing medical care to cost a lot more.


Additionally, medical expenses don’t really end with treatment at a hospital and post-treatment consultation, medical check-ups, diagnostic tests, and medicines can often cost more than the actual treatment itself. This is why it’s imperative to understand your health insurance plans and the coverage that they offer for different types of ailments, medical procedures, and post-operative care. 


There are also fixed-benefit health insurance plans that pay a fixed amount on the contraction of any diseases that feature on a predetermined list of diseases that you are most likely to contract. While these plans may cost a higher premium, a lot of the time, especially where medical care is concerned, time is of the essence. These plans typically pay cash upfront on the submission of a first diagnosis report, without wasting time asking for details. 


In conclusion, life insurance and health insurance are both essential aspects of a safety net meant to protect us and our families from the potential financial stress that could come from unforeseen circumstances. Health insurance also helps pay for preventive care which is critical to avoid a more serious condition later on. Lastly, while planning finances, life & health insurance need to be looked at as priorities, as well as necessities, and depending on one’s living situation, one can also opt for a family plan to cover the whole family in one policy.


“Insurance is just risk management. We transfer the risk from families who can’t afford it, to insurance companies who can. That’s all it is.” — Tony Garden


Please feel free to contact us for any further questions on life and health insurance and which policies would suit you best.

Comments

  1. UnknownMay 11, 2021 at 8:56 AM

    This article is an eye opener for businessmen,professionals, even for working sector. Nowadays the medical bills are high. First generation couldn't keep or sustain their wealth to the future generations.

    ReplyDelete
  2. UnknownMay 5, 2022 at 12:29 AM

    Amazing write-up! You always have good humor in your Blog's , So much fun and easy to read! Opening Account Online

    ReplyDelete

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