The ongoing pandemic has ushered in a new normal. It has forced people to rethink their security in terms of physical and financial health. People are researching methods to boost their physical immunity, along with financial immunity too.
The Nielsen Company conducted a country-wide study for SBI Life to understand what financial immunity meant to the general population and how COVID has affected it. It also aimed to understand the attitude of consumers towards life insurance and financial preparedness towards various critical illnesses.
Based on this survey, here are five steps you could follow to boost your financial immunity.
In the current scenario, maintaining physical immunity is paramount. With the threat of income and job loss looming large, there has been an increase in stress and anxiety. Individuals working from home also have had to deal with increasing work stress.
As reflected in the survey, 78% of the people agree that stress and anxiety affect mental and physical immunity to a great extent. This cannot be more accurate. When you are physically and mentally healthy, you have strong immunity and are protected from diseases and illnesses. You can keep stress at bay by making changes in your lifestyle, following a healthy diet, exercising, and meditating.
When asked if a sound mental and physical health is necessary for developing financial immunity, 76% of the people strongly agreed. You need to build up your financial immunity to safeguard against any medical emergencies. For doing this, you need to plan correctly and choose the right tools.
2. Understand what financial immunity means to you
The first step to building financial immunity is understanding it. There is no universally agreed-upon definition of financial immunity. It is different for every person, based on their needs, goals, dreams, earnings, lifestyle, among other factors.
For most people in the study, financial immunity meant being able to maintain security and stability of their family in case something was to happen to them or being financially prepared for any unforeseen emergencies relating to life and health.
You need to decide what financial immunity is to you. Spend time and think about it. It will not only put things into perspective but can also go a long way in helping you safeguard yourself and your loved ones from difficult times.
3. Know your financial preparedness for the uncertain times
In the study, more than 53 % of the respondents mentioned that they are not financially prepared to face emergencies. Those with Term insurance and a critical illness cover showed more confidence, with 67% sure about being financially immune.
It is essential to know where you stand and how prepared you are to tackle financial emergencies. Begin by estimating the risks. Account for your liabilities and expenses and consider emergencies. It can help you gauge your situation and take the right steps to secure yourself and your family’s future financially.
4. Plan carefully
It has been said time and again that relying on a single source of income is not advisable. You would need additional help to stay financially immune. This is where financial plans come in.
On asking what plans they intended to buy in the light of the current pandemic, 6 out of 10 people were inclined to purchase health and life insurance. Other instruments like FD, RD, PPF and NPF also featured on the list.
When asked about what financial instrument they would trust to provide their family with a safe future, life insurance and health insurance seem to be the most popular instruments people intend to buy for safeguarding the future of their family.
The uncertainty created by the pandemic has made people reconsider their priorities. So, while planning, keep all the calculated risks in mind. You can secure your family with life and health insurance, while still being left with something to contribute to your savings. You can also choose to invest in plans to help your money grow. Remember to properly plan before you choose any financial tool to ensure you are getting the best for your family
5. Choose the right financial tools
Choosing the right financial tools to build financial immunity is very important. In the survey, 49% of people mentioned financial security against critical illness as one of their major worries. Also, 2 out of 5 people were inclined to purchase a term insurance plan with inbuilt critical illness protection. Pure Term insurance, Endowment money-back policies and Term with added critical illness riders were some of the other preferred financial product categories. Interestingly, among those who don’t have a Critical illness cover already, about 7 out of 10 people were inclined to buy a Critical Illness plan/cover in the next three months.
The reason behind the popularity of term insurance plan with inbuilt critical illness protection is that they help you be prepared for any uncertainty related to life and critical illness and the ease of paying a premium for dual benefits in a single policy.
Critical illness insurance is even more necessary in the current scenario. Without any vaccine, people are worried about their personal health and of their family’s health too. The extra benefits that a term insurance plan with inbuilt critical illness protection provides over health insurance is a deciding factor for many. If you already have health insurance, experts suggest bolstering it with a critical illness plan to be prepared for any emergency.
The awareness about financial immunity in the general population is heartening. People are actively focusing on boosting their financial immunity and seriously thinking about their family’s financial future. The tips offered above simplify the things you must do to ensure you stay safe in the face of any calamity. In case of any difficulties, you can reach out to your financial planner.
All findings in the article are taken from the report -'Understanding consumer's attitude towards financial immunity' - A survey done by SBI Life in association with Nielsen