Insurance portfolio is incomplete without the 3 essential insurances – Life, health and accidental. You will still be sorry than safe, if you miss any of these insurances. Life is short; however, it could only get shorter with the thought of surpassing the heavy expenses incurred due to an accident. Often people think that life and health insurance is all that is needed. But the fact remains that you cannot be fully secured if you do not have an accidental insurance.
Life insurance covers all the expenses occurred due to early death. Health insurance covers all the bills related to hospitalization of an individual. What about temporary or permanent disability due to an accident? In this case, life insurance won’t help, as the individual is still alive. His health insurance will not cover his expenses beyond hospitalization. It could be a road accident or fracturing your legs during a match or even an injury due to a natural calamity. Every out of pocket expenses occurring during the recovery period of the accident is covered under the accidental insurance. In the case of accidental death, benefits are given to the beneficiary.
Mr. X, Mr. Y and Mr. Z are friends around the same age group. Each of them is the breadwinner of their family and have dependents to take care of. All of three have a different conception about insurances, and believe that they are well secured with the insurances they hold.
Mr. X has only life insurance and regularly pays his premium for it. He believes that his life and his family’s life are well ensured by his life insurance policy. However, Mr. X suffers a major heart attack and fortunately escapes a mere death. Mr.X who solely relied on life insurance is now not liable to receive any claim from the insurance company to pay off his medical bills. The insurance company informs Mr. X that, in case he dies due to heart attack, his family is liable to receive claim from the insurance company. Mr. X now wishes to die.
Mr. Y and Mr. Z are on their way to the hospital in a car to see Mr.X. They meet with a severe road accident, causing fracture to their legs. They both are advised to take complete bed rest for the next 6 months. Mr. Y has both Life and Health Insurance. Mr. Y is relieved that his medical expenses were covered by the health insurance. However, the thought of post recovery expenses and no income for the next 6 months eats him alive. Mr. Y was later informed that a personal accidental insurance would have covered all his post accidental expenses. Mr. Y now fears accidents.
Mr. Z has all the three insurances – Life, Health & Accidental. His hospitalization bills as well as post recovery expenses were covered by the insurance policy. Mr. Z holds neither wish nor fear of death.t.
When it comes to accumulative money, referred to as savings, people don’t know what to do about it. It is often used as expenditure or saved for future purchasing. It is a common phenomenon to see money locked up in real estate or fixed deposits, given to someone or simply untouched in saving account. There is clearly no financial goal or understanding behind this.
Saving and Investment are synonymously used for each other. However, when it comes to the actual practice, each one should be dealt separately. It is imperative to understand that both these terms – Savings and Investment have a different goal. You always save for short-term but investment is always long-term.
| Savings | Investment | |
|---|---|---|
| When you have enough money to survive for the next 3 months | ✔ | |
| When you have to keep debt under control | ✗ | ✗ |
| If you have good amount of money that can be used across various financial products for higher returns | ✔ | |
| Your goal is to utilize the funds in short term | ✔ | |
| You have a long term financial goal – Children Education fund or Retirement | ✔ | ✔ |
| Your goal is to grow wealth, ready to take risk and you have an emergency fund set for small expenses | ✔ |
Marriage is a complex amalgamation of two differently thinking and acting souls. You really need to talk it out to avoid misunderstandings and doubts. If you’ve known your spouse even before marriage, you exactly know how & when your spouse could react in a given situation. Even if you know each other so well, there are some things that call for a mutual agreement and understanding. So what should couples really discuss?
What to cook for dinner? Hair color or haircut? What to wear for your friend’s party? …. Well yes! If you know these, you know your spouse better. However, there are far more complex topics that need discussion and joint consensus.
Financial decisions can be stressful. One really needs to be wise and responsible while taking these decisions. It has been surveyed that 43% Indian men do not discuss finances with their wives. On the other hand, women shy away from discussing money with their husbands. Needless to say, these women are clueless of their spouse’s investment. Unfortunately after the death of their husbands, the bigger shock is that they are unaware of any written will or testament or even any financial succession planned by the husband.
The Millennial couples are usually financially independent. This means that both know their financial goals, however, these are not mutual. It often comes down to, this is mine, that is yours, but it is never ours. Each of the spouses has finances sorted in their head, but neither of them knows what finances the other plans.
Finances can be complex but there are simple ways to tackle it. All you need to do is initiate the talk of money with your honey.
Financial advisors know about finances and most importantly they help you know your finances. Personalized financial advice to both husband and wife can make all the difference to your family. As life goes on, the cycle of finances go on and on, systematic financial planning would only keep your better half in a financially good position in your absence.
