A Misplaced Priority: Investment First and Insurance Later

Investment opportunities are more interesting than Insurance. Investors will likely to be attracted to the supposedly “high returns” that investment opportunities usually advertise. However, during financial planning process, we need to priorities what is important because it seems like investors have misplaced their priorities.

FSM Nov 01, 2017 3743

At FSM Insurance, we have been promoting Health and Term Life Insurance products which provide the most basic form of protection that everyone should have. However, these products may not yield any returns at all because as much as possible we do not wish to exercise our right to make a claim unless necessary.

Investments are Exciting while Insurance is Boring!

Investments are exciting because investors get to see their profits increase multiple folds whenever the market sentiment is in their favour. This is definitely more enticing than discussing about protection for death or illnesses. When it comes to investments, everyone seems to have their own opinions on how the market is going to move and how they have profited from it. Moreover, investors will spend time and effort drafting their retirement plans so as to ensure that they can at least continue their existing lifestyle when they are retired.

If we compare this against insurance, it will be a different story. Consumers will avoid questions on protection and whether they have sufficient coverage in the event of death or permanent disability. Furthermore, they will need to pay for the protection but the payout will only be beneficial to their dependents. Hence, they are reluctant to discuss about insurance planning and prioritise this as a lower priority in the financial planning process.

This misplacement of priorities could have an adverse effect if we were to suffer from an occurrence of any events that may lead to death or permanent disability. Since we have prioritised investments ahead of insurance then we could be forced to sell off our investments to pay for our hospital bills or providing a consistent stream of income to our dependents if we are unable to carry on working anymore.

The financial burden on ourselves or our dependents will be too mentally draining if we were not prepared for it. More importantly, if the markets are not in our favour, we could be selling at a loss which will add on to the financial stress at that point in time. Hence, we should ensure that we get our priorities right when we are going through our financial planning process with our advisers.

For the Investors and Savers, Why do I need insurance?

Insurance is meant to transfer the risk to the insurers to that we could have peace of mind for ourselves and our dependents.

We can start by asking ourselves these questions and evaluate further whether insurance planning should be our top concern as compared to investments.

  • Do you have sufficient savings to adequately cover yourself or your family if you are burdened with high medical bills?
  • Do you want your hard-earned savings to be the only source of sustenance should any unfortunate event happen to you?
  • While trying to achieve your financial freedom, will you be willing to sell your investments prematurely in a bear market to pay for expenses which otherwise can be covered with an insurance policy?

If your answers to the above questions are "No", it will definitely be worthwhile to review your financial portfolio and get the priorities right.

For any further enquiries, drop us an email at clienthelp.my@fundsupermart.com and our dedicated team of advisers will be happy to assist you.

 

Protect yourself and your loved ones now and enjoy 30% cost-savings at FSM INSURANCE!

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