Some essential lessons to learn from Covid19
- Avoid taking a loan that you find difficult to repay- loans are a great source of financial help in tough times and also a great help in fulfilling long term goals, including buying a house or car. Furthermore, it is vital to understand your repaying ability before getting a loan. A loan that you cannot afford to repay can destroy finances and the loss of your precious assets.When you can't repay a loan, you also have to go through a lot of mental stress. And during the current times of pandemic, a loss of income is too common, and non- repayment of loans can lead to undesirable outcomes. Thus covid19 has taught us never to over-borrow and always have a contingency plan including Covid-19 + COVID Health Insurance to deal with unforeseen events.
- Always have an abundance of an emergency fund- An adequate emergency fund completes a contingency plan. Amid the tough times like the pandemic, we have understood the importance of losing our jobs or income as the world has come to a standstill. An emergency fund is the best way to meet our day to day expenses in the absence of regular earnings. So you should ensure that your savings are equal to six months of your expenditure; additionally, you need to enhance it to meet your future requirements.For further capital appreciation, you can also park some of your savings in a high-interest savings account or fixed deposit account. Therefore it is essential to start saving early before it's too late. You can start saving by reducing expenses and implementing severe cost-cutting measures by cutting down on wasteful expenses.You should also give importance to your health by putting your savings in buying Covid-19 + COVID Health Insurance.
- Avoid dependence on your employer-provided health insurance plan- The current pandemic has already forced several organizations to fire their staff. Things might worsen if the economy fails to bounce back anytime soon. In such a challenging situation, it is next to impossible to get the medical help that included hospitalization as you wouldn't be able to access your employer-provided health insurance plan.Looking at the tough situation, getting a comprehensive Covid-19 + COVID Health Insurance for yourself and your loved ones are advisable. The financial burden can be proved risky for your savings or push you into debt. This all might be simply because the employer-provided insurance cover isn't enough to cover your medical expenses and your add-ons might be gone if you lose the job.
- Diversify your portfolio investments to mitigate the risks- Almost all the investment avenues have been majorly impacted due to covid19. Market volatility has resulted in a drastic fall in profits and deposit rates. An extreme slowdown has been felt by the realty sector also. Furthermore, gold investments have earned commendable returns. The lesson learned is to spread your savings and expenditures across various sectors without putting all eggs in one basket to minimize the risk.Another important lesson is to align the investment as per your risk-taking ability, financial goals, and liquidity needs. Avoid chasing unrealistic return targets. You shouldn't discontinue a significant investment without thinking about it deeply.It would be a wise decision if you consulted a financial advisor.
- Prepare your will within a stipulated period and also complete your nominations- It is quite common that people delay in making their will and completing their nominations formality. Due to which they pass away suddenly in panic situations, including the current pandemic, the family members need to struggle for years to claim the inheritance.If the will isn't prepared on time, it would only add to personal sorrow. If the situation worsens, family disputes might turn out to legal conflicts that mightn't get resolved quickly. The lesson is don't delay your nomination formalities related to your investment, insurance covers, or retirement plans so that your heirs don't stress your absence.
- Stay disciplined- The worst part of losing money is investing it all or having no savings. The pandemic has taught the importance of mitigating the risk before taking the plunge. Thus investors need to understand the importance of saving and investing wisely.
The crisis hasn't left any sector untouched, including finances. The majority of the investors are in a dilemma that what went wrong and what can be done ahead to get the economy back on track. While it is good to believe that economy will bounce back soon, one must also keep in mind the lessons taught by the current pandemic concerning finances. In addition to investments, one must keep their health in mind and take some measures like Covid-19 + COVID Health Insurance to avoid running out of cash in the pandemic. The best part about learning these lessons is you are well prepared in handling finances.
The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale.
Consult with your financial advisor before making any decisions on insurance purchase.
*Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time