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:
- Identify the risk
- Determine how much of that
risk you can take
- 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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