Risk is at the core of every activity you undertake in life. Every aspect and decision in life has an inherent risk involved. However, have you ever wondered if your absence poses a financial risk to your near and dear ones?
“The key is to manage the risk, not to avoid it.”
If your family members depend on you financially, your long term financial goals have to factor in their requirements so that they are not unsupported in case of unforeseen eventualities or emergencies. Saving smartly, investing in suitable insurance plans and managing expenses wisely are a good starting point for securing financial safety. When you manage life’s risks with life insurance, you give yourself and your loved ones the power to face the ups and downs of life confidently.
Here’s a closer look at what risk management entails and how some tools help reduce risk.
What is Risk Management?
In simple terms, risk management refers to identifying and controlling the risks surrounding your decisions and actions—whether they are risks associated with your assets or health. A highly preferred tool to minimize risk is life insurance. The primary purpose of insurance is to reduce the risks an insured person faces.
How Does Insurance Reduce Risk?
Everyone inherently faces two major risks: the risk of life and the risk of health.
If left uncovered, these risks could financially ruin people’s lives.
The first inherent risk is the RISK of LIFE - as life is uncertain. However, you need not worry about finance while dealing with these risks. With a solid life insurance policy, you can live a stress-free life. You can also choose a suitable health insurance policy that safeguards you and your family in case of medical requirements. This way, insurance provides an additional layer of financial security.
The second is the RISK of HEALTH - Good health is key to a happy life. The COVID-19 pandemic has demonstrated the importance of good health as well as health insurance policy. A suitable health insurance policy will assist you in dealing with any health emergencies and medical treatments in the family and it will serve to adequately cover all medical costs.
A leading financial expert says, ‘Life insurance is not an investment. It is a risk management tool to protect future income’.
Check out how life insurance protects you financially amidst uncertainties:
- Secures your family’s future: If you are the sole earning member of your family, the first thing you should do is to save responsibly, identify your long term financial goals and buy life insurance cover that helps to safeguard your family’s needs. Consider the difficulties your family would face in your absence. The life insurance plan you invest in will ensure their financial well-being and support them through difficult situations.
- Fulfilling financial goals: Everyone has financial goals. What matters is the effort you are ready to make to achieve those goals. A series of small steps in the right direction can help you achieve your goals such as tracking inflation-related trends, investing wisely after assessing your goals and spending carefully. If your goal includes planning your retirement and generating a source of passive income, life insurance is the financial tool you need for retirement planning. Thus, you will not be forced to rely on others, and you can live independently in later years.
- Encourages savings and investments: Disciplined saving is key to financial planning. For those interested in exploring investment options, consider Unit Linked Insurance Plans. ULIPs offer the dual benefits of insurance and investment. One of the key features of ULIPs is they are market-linked instruments, and therefore, give returns in line with the market while minimizing risks. They effectively promote and ensure risk management.
We have been motivating our readers to save, invest, and grow their wealth through Future Generali Easy Investment Online Plan. This is a ULIP product that offers the following benefits:
- Provides Protection - The plan provides a life cover along with added benefit of wealth creation
- Is flexible - It offers the flexibility to meet unexpected expenses by allowing you to partially withdraw some money 5 years after buying the policy.
- A Systematic Investment Tool - The plan promotes the habit of saving systematically over a long term through monthly/annual payment modes.
- Enhances Your Returns with Loyalty Additions - You are rewarded with additional units during the last 5 years of your policy term. These additional units are added to your fund, provided all to-date premiums are paid.
- Gives You Control - The plan gives you the option of switching funds so that you are always in complete control on your investments.
- Offers Tax Benefits - The plan is eligible for tax benefits under Section 80C and Section 10(10D) of Income Tax Act 1961.
In a Nutshell
Risk management is crucial to avoid losses in life. Managing the risks associated with an individual’s life is even more important, as no one wants their family to suffer in their absence. Future Generali India Life Insurance offers several plans to suit an investor’s financial needs. Our experts have been helping customers for the past many years to reduce risks. As many believe, ‘I don’t call it life insurance. I call it Love Insurance. We buy it because we want to leave a legacy for those we love.’ Why are you still waiting? It is wise to secure your family’s future.