11 MAY 2016
Plan early, plan better!
Ants at work
Have you ever seen a group of ants at work? They collect food and store it in their ant-hill for consumption during the rainy days. This they do when it's early summer. They move in groups and very diligently collect food collectively. The moral of the story is plan early for rainy days.
Just like how ants start collecting food when it is available and there is bright sunshine, you could also do yourself a favour by planning early for those rainy days. For you, rainy days could mean critical illness, kids’ education, retirement or in a worst case scenario, your unfortunate demise. It's no point crying over spilt milk, it's prudent to plan for those testing times when you are in a good phase of life.
Protect yourself and your family
Protect yourself against the events mentioned above by buying appropriate insurance. It's highly likely that you'll get a better deal when you are younger and fitter than when you are in your middle age. Your premiums are likely to be lower and your cover that much higher.
Best time to invest in insurance
What is the best time to invest in insurance? The answer is NOW. If you are in your early or mid-twenties, just married and wanting to start a family sometime in the not-so-distant future, consider the following types of insurance:
- Medical insurance. Get yourself medically insured as hospitalization expenses may burn a big hole in your pocket.
- Critical illness plans. Medical insurance will only cover the hospitalization expenses. If you are fortunate enough, you may not lose a lot of time in recovery. However, in the event of you having to stay away from work for a long time for recovery, you may face a loss in income. Buy a critical illness plan to provide you with funds that will help you with your monthly expenses during the recovery period.
- Term plan. A traditional insurance plan that will provide your family with a payout in the event of your unfortunate demise. These plans are cheaper when you are young and it'll give your family the security of income, especially if you are the lone breadwinner in the family.
- Endowment plans: Endowment plans are a great option if you start early. You can plan for your goals by saving some portion of your income through endowment plans. These plans provide guaranteed maturity and death benefit, some also provide loyalty additions so if you invest for a longer time you may end up getting good returns. However, the life cover provided by endowment plans is comparatively lower than that provided by a term plan because their purpose is different and they fulfil different needs. Endowment plans can be opted when you are starting your career so that you save enough for the goals in your life like marriage, house, child’s education,etc.
- Retirement plans. It may sound too distant, but plan for your retirement during the early stages of your career. That way, you'll have accumulated a decent amount of money by the time you retire.
The earlier you start planning for your financial freedom, the better it is. Understand your needs and then take the right decision.
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