Revisiting Your Finances Amid Challenging Times

Smart ways to recheck and revise your financial paraphernalia to ensure you’re prepared to face uncertain challenging times.

Your life is the most precious of all assets, there’s no doubt in that but there are other precious aspects attached to your life too like your health and wellness, your life-long saving and investment, your near and dear ones but a single pandemic or uncertain disease can wreck your financial future in a very short time. There are some immediate practical financial precautions that you should take note of in the current times to save you from hasty times.

Recheck your life and health portfolio:

As the pandemic picks up pace around the world, the best you can do is take care of yourself and our families by opting for a term and/or health insurance policy to save them against life and high medical costs risks. The future is uncertain, and hence our financial and health needs may change drastically and the worrying fact that no one is immune to the disease and that many carriers of the virus may not even show any symptoms gives rise to the necessity of having an appropriate cover against life and health risk. A term plan is a good way to save your life risks at comparatively less premium than a traditional insurance cover and it’s a great way to save your dependents against life risk but based on your money habits and financial plan you can finalize on which plan works best for you with your financial coach.

The same goes for Health insurance as well because understanding the diseases covered under your health cover is of utmost importance. The health cover for you and your family again depends on your financial needs but make sure that you prioritize this. There are few developments by IRDAI, it has allowed payment of annual health insurance premiums on a monthly, quarterly, or half-yearly basis. If you file a claim during the year, the insurer will process the claim amount after deducting the balance premium to provide you ease in payment.

 The regulatory body has issued a list of guidelines that specify the various illnesses that will now be covered under a regular health insurance cover. In June last year, IRDAI stated that if a health insurance policy has completed eight years, i.e., the policyholder has been paying a premium for eight years continuously a health insurance claim cannot be rejected except for proven fraud and permanent exclusions. This means a customer’s health insurance claim won’t be rejected from the ninth policy year unless you have indulged in fraud or are making a claim for a permanent exclusion.

Recheck your contingency fund:

Any uncertain income loss or salary reduction can take a toll on your monthly budget putting you under a lot of anxiety to find a solution. Make sure that you discuss your financial grounds with your financial coach to ascertain the needed ideal emergency corpus so that you can prepare for the future living in present. Make sure that you use your credit card on a need basis not to spend without any control and the amount spent should be within your repayment capacity and maintain as many liquid assets as you can in the short-term.

Recheck your financial plan:

The essential elements of your financial plan should be the following. To have adequate life insurance and health coverage, a well-established emergency fund, a well-diversified portfolio within your risk tolerance level, etc. During a prolonged leave of absence from work, one should focus more on liquid assets such as bank fixed deposits or liquid funds to pay for treatment or even for living expenses in case of no salary or job loss than investing completely in equities or real estate without taking care of basic functionalities of life.

 

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