BEFORE INVESTING : EMERGENCY FUND VS HEALTH INSURANCE VS TERM INSURANCE

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Emergency fund: To Cover unexpected expenses such as medical emergencies, car repair, catastrophic situations one must build Emergency fund. For salaried individuals minimum 3–6-month salary can be considered as an emergency fund. For self-employed individuals a minimum 1-year annual expense can be considered as an emergency fund.

Where to park it: High-interest savings account, liquid mutual funds, FD accounts — anywhere easily accessible and low-risk.

If you are considering DOOMS DAY Scenario like economic collapse, war, hyperinflation, or breakdowns in government — physical gold often comes up as a go-to survival asset. Physical gold that can cover minimum 1-year annual expense can be considered



Health Insurance: In case of medical emergency a large chunk of money is required. The cost of medicines and medical treatment are skyrocketing every year. Not having health insurance will eat your savings and investment easily. It will be hard to start again from zero, so it is always preferred to maintain a health insurance. Even your employer is providing you a health insurance, it is recommended to maintain a personal health insurance, because job-based insurance may be limited or lost if you change jobs.  Pick a medical insurance that covers your family and opt for Super Top-Up Health Insurance Policy.

Term Insurance (Life Insurance): If you are the only bread winner of your family, it will provide financial protection for your dependents in case of your untimely demise. It is good to consider if you have loans and liabilities, aging parents.

Typically, the coverage of 10- 20 X for your annual income is a good benchmark.

Consider pure term insurance and it is more cost effective. Avoid endowment or ULIPS


Conclusion: I know people who have been paying premiums and think that they got nothing in return. we must cultivate the below mind set:
1) one must feel happy for not getting sick.
2) one must be grateful that the money which one paid as premium is useful for those who need it.
The real value of insurance is peace of mind and protection from life’s unpredictability — not immediate returns


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