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Proper Insurance Management




You can get insurance coverage for all kinds of things: to reallocate lost holdings in the event of premature death (life insurance), to cover the costs of damage to your house (homeowners insurance), vehicle (car insurance), or even your new television or mobile or any other gadget (what we call gadget insurance).  Health insurance is very important and standalone part of insurance. Insurance management should be an important part of our lifestyle.

From a fiscal view, the steps in mitigating these risks are straightforward:

  1. Identify the risk
  2. Determine how much of that risk you can take
  3. Insure the rest of the risk

Identify the risk

What we do here is putting or evaluating the risk in terms of Rupees.  For life insurance find the income that is to be replaced if the recipient of the income is to die.  Always remember that life insurance is extremely important and most people realize the importance of a cash flow only after.

Determine how much you can bear

This step is very important because sometimes people spent too much on little risks and too little on bigger risks thus running themselves into financial troubles later on. The thing is that the market is paying you to take the risk.  You have to calculate the way your premium amounts by determining how much of it goes to the administrative tasks of the insurance company, and how much of it towards your actual insurance coverage. 
In life, we have to take on many, many risks, but until it remains a manageable amount to insure, nothing can bother you.

Insure the remainder

Since you determine your risks in terms of money, you can now decide which insurance policy to choose from. You are now insuring the remainder of the risk that is completely unmanageable by you but can be covered by a proper insurance company.

There are many good consultants out there that are experienced equity dealers as well as insurance managers. You can find the right one for yourself and seek their assistance for insurance management.

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