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Insurance Thumb Rules To Build Financial Resilience

Zopper Team Basics of Insurance February 1st, 2024
Insurance Thumb Rules To Build Financial Resilience

There are many ways to be financially resilient. Insurance tops the list! In the last few decades, the insurance sector in India has witnessed tremendous advancements. E-commerce websites and online aggregators assist customers in identifying their insurance needs in real-time. This is now happening across digital platforms and gateways, propelling insurance distribution beyond the offline medium through embedded and contextual solutions.

Through various initiatives including social media, InsurTechs are driving more awareness about why insurance is a critical need. Spanning different sectors with emphasis on digital processes, InsurTechs are helping businesses, enterprises and households to choose insurance solutions that are based on their unique requirements. As technology continues to transform the insurance sector, the guiding principles of taking the right insurance cover remain the same. 

Choose an Affordable Insurance Plan with a Long Term Vision

The first thumb rule is to choose an insurance plan that you can pay comfortably and in a stress-free manner. Refrain from opting for high premium plans that you are not sure about. You can opt for bite-sized insurance plans that are pocket-friendly, relevant and instantly accessible through digital platforms. This way, you won’t burn a hole in your pocket.

Save Money From Day One

A high savings rate is essential to build financial abundance and resilience. It means that you'll takes years of rigour, frugality and discipline for financial resilience and wealth management to soar. No matter which sector one works in, it is essential to ensure that savings increase significantly year-on-year. Start with something as simple as five percent and increase it to up to thirty percent as you progress. By ‘saving’ smartly and investing in high yielding financial plans, you can build your wealth intelligently and not just park it as idle in your bank account.

Choose the Longest Term For Your Insurance Plan

Worldwide, a well-known financial thumb rule is that the longer you stay invested, the more your wealth will grow through the power of compounding.

As Morgan Housel writes in his bestselling book, The Psychology of Money, “Compounding only works if you can give an asset years and years to grow…it’s like planting oak trees. A year of growth will never show much progress, 10 years can make a meaningful difference, and 50 years can create something absolutely extraordinary. But getting and keeping that extraordinary growth requires surviving all the ups and downs that everyone inevitably experiences over time.”

Never Miss Your Premiums 

Prioritise your financial and insurance commitments with utmost care and discipline to ensure that premiums are never missed. Your insurance plan can lapse and this means you may not receive the required coverage when you have to tackle a medical emergency. 

Understand Coverage Details, Benefits, Exclusions Thoroughly

Before buying any type of insurance, it is essential to understand what it covers and what it excludes, besides decoding the benefits. Say you are considering health insurance, you need to have a thorough perusal of what the coverage entails, what are its benefits and exclusions, sub-limits, ease of claims process, whether it is mostly cashless or reimbursements, etc. 

Check whether ambulance cover and day care treatment are included. Check the clauses where the insurer has referred to pre-existing conditions and whether it is covered or excluded.  

Remember, some insurance plans stipulate long waiting periods for certain ailments whereas others may enable coverage immediately. These aspects have to be thoroughly understood.

InsurTechs recognise that consumer needs evolve with their changing lifestyle patterns. Given how rapidly businesses and industries worldwide are already experiencing the impact of technological transformations, it is critical to understand the importance of establishing financial resilience. Maintaining the quality of lifestyle also means raising the bar on providing seamless and well-tailored insurance solutions that cover a diverse spectrum of businesses, enterprises and households. 

To navigate an array of InsurTech solutions, book a demo instantly.

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