Every month I take a long hard look at my bank statement. Every month I see premiums being deducted from my account in favor of insurance companies. Every month I consider what a great business model the insurance companies have—recurring revenue streams based on people’s fear of calamities that may happen in the future.
And I realize that I am one of those people.
I have often considered stopping the stop orders on my bank account and spending that money on other luxuries. Yet every time I think it through, I realize that those insurance premiums are money well spent.
When the time of crisis visits me (as I know it surely will at some point), I will appreciate those premium deductions in a way I can’t quite understand while the sun is shining and I have no care in the world.
When faced with calamity, the question changes from whether you can afford to go without insurance to whether you can afford not to go with insurance!
The answer is obvious. You cannot afford to take the chance and go without insurance. Period.
Start by covering the basics
If you don’t have any insurance in place, start by covering the basics. The three most important areas to cover are your life, property, and health.
When you die, you don’t want to leave your dependants stranded with no access to finance. They have been supported by your continued efforts to bring in the bacon and care for them. However, if you die suddenly, their entire lives will be disrupted and potentially ruined if you either leave them with a mountain of debt or leave them with insufficient money to maintain their standard of living. Life insurance will assure you that they are well taken care of.
Your health is your wealth. Only when you no longer have it do you realize how most of us take our good health for granted. Any sickness or health issue requiring hospitalization results in high costs. It would help if you covered these costs when they arise for you and your family. Failure to do so will result in an awful situation and lead to financial ruin or medical consequences for lack of proper treatment.
Your home is your base. Your home is your castle. It is your most significant investment, and if you lose it and cannot replace it, you lose almost everything you have worked so hard for. Insure it. Failure to do so is too risky.
Follow through with proper estate planning
Once you have the basics covered, you should fill in the gaps by looking at insurance as part of your estate planning. In addition, your long-term financial strategic goals can be strengthened by looking at various niche insurance products designed for people in your situation to grow your wealth and ensure that you achieve your long-term financial goals.
Insurance and estates go hand in hand if you properly plan for your future for you and your family.
The main takeaway
According to LIMRA’s 2020 Insurance Barometer Study, only 54 percent of Americans were covered by some life insurance policy.
One of the apparent reasons for this is that most Americans wrongfully believe that life insurance is more expensive than it is. Half the population estimates the cost of life insurance at more than three times the actual cost.
It is clear that life insurance is necessary and will provide for your family and loved ones when you are gone. You owe it to them to assess the costs, evaluate the risk and then choose a life insurance policy that suits your budget and needs. It is way more affordable than you think. I think….
Krishna Murthy is the senior publisher at Finance XOD. He is not only the senior publisher but also the owner of Tricky Finance. Krishna Murthy was one of the brilliant students during his college days. He completed his education in MBA (Master of Business Administration), and he is currently managing the all workload for sharing the best banking information over the internet. The main purpose of starting Tricky Finance is to provide all the precious information related to businesses and the banks to his readers.