Death is inevitable and no one can escape it! We are all busy with education, jobs, family, travel, finances etc and never really think about such morbid details. The thought may seem negative but truth can be harsh. Apart from death, there are other eventualities that can exhaust your savings or investment. Here are few regrets people have when it comes to financial planning:
- I should have saved more to meet my goals: Most of us have dreams/goals like travelling, downpayment for a house, buying a car, etc. Sometimes we save to meet these goals in life but there are times when an emergency occurs and then we realize and regret that we should have saved.
- I should have saved more for my retirement: Some people feel that they should have saved or invested for their retirement. If you have not yet planned for your retirement funding, you may face financial crises. Post retirement one may not have a regular income and one can be loaded with a lot of medical bills which can hamper all the savings.
- I should have taken a higher health cover: Everyone tends to fall ill, a health cover is of utmost important. With an increase in the occurrence of critical illness, it’s also important that you are adequately covered. Another way to secure your savings against critical illnesses is to opt for a critical illness plan. A critical illness plan will provide a lumpsum amount on the diagnosis of a critical illness. Since the treatment cost involved in critical illness is way too high a mediclaim may not be sufficient to fund it. A critical illness plan can complement your health insurance and provide financial support when you’ll need it the most.
- I wish I had taken a term insurance policy earlier: Financial protection and stability of the family is the top most priority. Every parent will want their kids to be financially stable and not compromise in his/her aspirations. Protection becomes important because when you have dependents it is important that their financial future is not impacted in your absence. Your loans should not be a financial burden for your family members. In today’s world, most of us understand the importance of protecting our family members by opting for an insurance plan. However, what’s still a hurdle is people procrastinate this decision of taking a term plan. So when one realises, it’s either too late or his/her premium must have increased to a great extent. Premium rates are lower when you are younger and healthier but once your age increases with every birthday your premium rates increase, also if you have health issues chances are – your policy will not be issued.
- I should have made some long term Investments: Investments are always a great idea and if these investments are long term it is even better. Small savings and investment can be done for your short term goals like say you plan to take a short trip to a nearby destination, in this scenario, you can invest in RDs and FDs. RDs and FDs provide good returns and money can be liquidised easily. However, if you have long term goals like buying a house, child’s education, etc. Now these goals are expensive and need long term investments which will not tempt you to liquidise your money and your money will compound every year. Investing in funds like equity or a mixture of both debt and equity can give you good returns. If you are considering mutual funds, then not all mutual funds provide tax benefit. So if you are looking for good returns and tax benefits, ULIP can be a great option. In ULIP, it is advisable to look for funds that have good ratings.