Why should the future be a risk?

Life is full of risks. Everyone should have right to be hopeful about the future. Risk management also known as “Insurance” is not a new topic that we have confronted.  Though it has been in existence for more than 200 years today, many people are still reluctant to talk about insurance because it is unpleasant to contemplate about one’s death, health issues and mishaps.

Most of the times people might say, “Well, you know, I am so healthy and secured now. What difference is insurance or risk management going to make?”

But then, just because disaster has not fallen on us before does not mean that it is not coming. We must be smart enough to look down the road and say, “Will there be errors in my present judgement of philosophy? What is that going to cost me in coming one year, six years, one month, six months? The gigantic cost that comes with our errors in terms of money and health cannot be undermined. I guess that no one wants to regret anything in their life. So why should we make the financial management which is one of the most crucial parts of a human life an exception?

With more than 9 years in a financial workforce, let me share my experiences about risk management plan in our daily lives. Before the storms hit any of us financially, I believe I must share more about it to my best so that we can be aware about and ready when the uncertainty hits us.

 To breakdown insurance in a more simplified version, following are the most common policy that any insurer will offer:

A. Life insurance:

I term it as a gift for loved ones as no one can stay immortal. Responsibility cannot be forfeited or ignored when it comes to care for the people that they love and are responsible about. Life insurance plan will ensure that in an event of unforeseeable demise, the insurer will assure the family members will maintain the lifestyle as it is. Creating value rather than been a curse for the family members is the utmost priority which life insurance provides to the insured.

B. Critical illness:

Also named as living death benefit, nowadays it is so simple to die rather than to live with illness. The loss of work and the cost of medical diagnosis while being at the treatment greatly impacts the livelihood. The expenses will eventually rise to threefold of the expenses we used to have. Are we prepared for the uncertain future if we are diagnosed with the certain diseases?  Growing ages has a co-relation with medical upheavals. Insurance companies will either not accept or ask for a higher premium to those applicants who have already been diagnosed with certain diseases. The best wise decision is to enrol now. Earlier the enrolment; more cost effective will it be for the insured.

C. Medical:

While medical cost is rising at the whooping rate of 7 % per year, the affordability for commoners to choose the best treatment has been limited. Knowing the fact that there is a never-ending long queue in public hospital, the appointment schedule that extends beyond 6 months. The affordability to pay bills in private hospital has been a prime concern and the catastrophic problems is going to rise as the population increases. Therefore, Medical plan helps to compensate the patients bills incurred during treatment. A person can choose their desired specialist without a need to think for the cost incurred or the waiting time.

D. Accident:

No one wants to think about losing the essential parts of body. How about not able to work for the rest of the life and staying disabled? Physical and emotional sufferance is in one hand while financial burden further puts pressure in one’s life for not being able to perform certain work. So, Accident plan is there to secure the continuous financial support during disability.

Next, how to effectively set a financial goal. Effective budgeting plays a crucial role because different individuals have their own priorities and standard way of living.