Financial protection first
If you are the sole bread earner in the family, it is absolutely imperative to opt for a term plan that will make sure your immediate family (spouse and children) is taken care of in your absence. The main purpose of a term plan is to replace future income. This is especially true when you have a non-working spouse.
Invest to grow wealth
If you want to reap the benefit of a potential upside in the equity market, but do not have the time to invest directly, go for Ulips. Ulips offer two-fold benefits of market-linked returns and a life cover for your family. Especially online Ulip is recommended, as it is highly cost efficient.
Rebalance portfolio regularly
Do not just invest in the market and forget about it. Take stock of your fund and see how it is growing or losing out, as the case may be. Ulips offer you the flexibility to invest in a fund or multiple funds based on risk appetite. You also have the flexibility to switch funds based on your market outlook. The market is dynamic and small decisions may lead to big changes in a fund.
Little book of legacy
People tend to put off important financial decisions like a Will for a latter time, without realising the unpredictability of future. The ‘little book of legacy’ will make sure your family, especially children, will be aware of where and how you have invested your money, along with other assets and liabilities. The book should have information on all investments, savings, assets and liabilities in one place.
Health is wealth
Even if you are in good health, having health insurance is important. You never know when you or your family members will need medical care. A health insurance plan can provide you an affordable way to get it when you need it. Health insurance can help you prepare for the worst.
Plan for whole of your life
Whole life covers are designed to last as long as you do; yet most people prefer to opt for term covers. Because the latter have cheaper premiums. If you can afford it, whole life plans can make a lot more sense. The plan provides life coverage even after the maturity benefit has been paid, leaving a lumpsum for your family after your death.
Take charge of retirement
Most people tend to put off saving for retirement, as they believe there is plenty of time. You cannot be sure how much you really need to save for retirement. Start with a rough estimate and begin saving. Sooner you begin, the more the corpus will be due to the power of compounding. Pension plans come with annuity to ensure we don’t outlive our savings and are regulated in such a manner as to make sure you don’t spend it indiscriminately.
Upgrade your insurance
It’s important that your insurance coverage meets the changing demands of your life. Big life events like marriage, birth of a child or buying a home will have an impact on your finances and, therefore, should be reflected in your life insurance policy. This is why it is important to sit down and review your life insurance from time to time.
Do not postpone
Waiting to begin your savings plan can have a huge impact on the results. A delay of even a few years could cost you a lot more due to the power of compounding in investment. For example, a 30-year-old male can accumulate almost Rs 37,91,610 by the time he is 50 years old. However, if he chooses to start saving after five years, he will accumulate only Rs 23,67,030 (loss of almost Rs 14,24,000).
Avoid herd mentality
Your finances are unique. There may be similar individuals, but situations, needs and risks will always vary. So don’t fall into a mob mentality and go for the product your friend is opting for, without understanding its benefits. Analyse your requirement and objective for savings before choosing an insurance cover that is best for you and your family. Don’t put all the eggs in one basket. Diversify your assets and make sure you know every aspect of those investments.
Curated from 10 insurance resolutions | mydigitalfc.com