What has the pandemic taught us universally? 1. Things can change quickly. 2. Focus on your health.
During the pandemic, unprecedented incidents and income uncertainty have prompted people to secure their money wisely to avoid instability.
The insurance and investing landscape has changed. The growing middle class and young population, coupled with increased financial literacy, have placed emphasis on insurance, emergency funds, and investments as part of financial planning.
Understand emergency funds, investing and insurance in financial planning.
1. EMERGENCY FUNDS –
As premiums get more expensive as you get older, it’s best to purchase insurance as young as possible for you and your parents. Taxpayers can also enjoy tax benefits under Sections 80C and 80D for investments and medical insurance respectively. The sudden disappearance of an income-dependent or fatal illness can be a mental and financial burden. In these cases, if you have investments, you might have to use everything to get through. However, insurance will help you tolerate huge expenses with affordable premiums.
The SIP (Systematic Investment Plan) allows periodic investments instead of a lump sum all at once. You can plan a SIP for ELSS and mutual funds if you want to start with affordable and regular investments. The best part is that ELSS and mutual funds come together and leave you with large funds in a long term investment. Of course, be aware of the risks before investing.
After COVID-19, insurance premiums climbed 15 to 40%. It’s never too late to purchase insurance or invest. It is safe to say that insurance is above the investment for many families. Before committing to any investments, it is important to ensure that they have adequate emergency funds and insurance policies to support them in times of crisis. This gives enough leeway to engage in short and long term investments with risks.
With growing interest in post-pandemic health insurance, companies are seizing the opportunity to partner with insurers and offer group health insurance to employees as it is by far the best factor in break while recruiting competitive talent.
The author, Sanchit Malik, is co-founder and CEO of Pazcare. Opinions expressed are personal
(Edited by : Anshul)
First publication: STI