The dictionary meaning of "Immunity" is "proactive resistance to something damaging or destructive". Immunity not only protects from uncertainty but also strengthens one to meet challenges more effectively.
Financial immunity therefore means proactive planning for any financial uncertainty. Strangely it is required to be exercised by rich or not so rich – without any exception.
Financial uncertainty would primarily be triggered by internal factors like death of a breadwinner in the family, disability, critical Illness, major surgery or stroke of any member of the family, as well as external factors like rising prices, loss of job, loss of certain asset/property due to natural or man-made events.
These uncertainties could result in loss of income or an exposure to large liability like a huge home loan on dependants of the breadwinner and thus devastate happy living of the entire family. Proactive planning to contain such risks is therefore of paramount importance in everyone's life.
Here are some smart and "easy on your pocket" planning tools which would ensure you a smooth ride on the bumpy road of life.
Saving through a Systematic Investment Plan [SIP]
Rising prices [inflation] could eat into your regular earnings and affect your regular lifestyle and financial planning. Best way to beat inflation as recommended by financial experts worldwide is through smart investment in equity/stocks. Yes, the markets are unpredictable, but a long-term SIP can make you a sizeable corpus to face the uncertain future with a smile. Equity investment is near liquid like cash, hence that is another good reason for SIP/Mutual Fund [MF] investments.
A SIP is a monthly investment of a fixed amount, say Rs 5000 per month in the equity market, through insurance or MF. The mode therefore averages out all market volatility in the long run to make a cost efficient investment. You should invest for a minimum of five years.
Accidental Disability Insurance [PA Cover]
This is the cheapest and most sensible cover often missed by most of us. It covers you from permanent, temporary, partial and total accidental disability and death.
We are all exposed to the risk of an accident while using public or private transport or walking up on the stairs or even while crossing your neighbourhood lane. A disability can seriously damage all your future plans and leave your family exposed to huge and unbearable financial troubles.
Generally your credit card would have such a cover, but unfortunately it is mostly restricted to only air accidents, leaving a large part of the risk uncovered. An individual personal cover therefore makes lot of sense. You can easily get up to 50 times the current monthly income as a cover, which in event of a claim, is paid in lump-sum amounts according to a pre-defined calculation chart.
Term Life Insurance
If you are a breadwinner, then this cover is cut out for you. A term insurance, also called a pure life insurance, is high value coverage at an extremely low price for certain duration of life. One should have a cover of at least 100 times the monthly income plus the total of large loans taken. In case of unfortunate death during the covered duration, the entire lump sum is paid to your nominee, making him/her financially independent and stable. Would you not want that?
Critical Illness Insurance
Critical illness insurance is extremely critical in today's mad era of "CEO at 35 and heart attack at 40". Advanced social/healthcare experts foresee more and more families being financially vulnerable due to critical illness than even death of a family member. Lifestyle illnesses, skyrocketing medical costs, rising costs, low savings, large loans would easily paralyse a family in a month's time – emotionally and financially.
A critical illness cover provides a lump sum cover on diagnosis of up to 35 listed critical illnesses like cancer, heart attack, paralysis and major organ transplant. Remember to take it even if your company has given you Group Medical Cover.
A major surgery due to an illness or accident of a family member could easily burn a big hole in your bank account. A health insurance, also called Mediclaim, for all your family members vaccinates you from such an occurrence. It covers you from large expenditure on hospitalisation and its allied costs like room rent, doctors' fees, tests and scans.
Experts recommend a comprehensive heath cover with critical illness add-on for all at all times.
Personal Assets Insurance
A large amount of your earnings and savings have gone into building assets for your family like a beautiful house, car, jewellery and expensive gadgets. They all need a comprehensive insurance from natural and man-made calamities, burglary and other such mishaps.
So go for these essential smart and inexpensive tools and smile away into the future.
Cost of Immunity
|Accidental Disability Insurance||Rs. 10 Lakh||Rs. 1200|
|Term Insurance||Rs. 10 Lakh||Rs. 5000|
|Critical Illness Insurance||Rs. 10 Lakh||Rs. 3000|
|Health Insurance||Rs. 2 Lakh||Rs. 3000|
|Home Insurance||Rs. 50 Lakh||Rs. 3000|
*Indicative costs of a healthy individual of age 35.
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