Saving money can be useless if you have no insurance

We all know saving money can be more difficult than making money or spending money. All those of us who have regular monthly income need not worry about inflow of the money at the end of the month. It is also true that we can hardly resist the ever‐growing temptations of spending money on new gadgets, phones, electronics, eating out, new clothes or buying a new car. No wonder it is rightly said saving money is more difficult than making money or spending money. Saving money is like climbing a hill. It requires a lot of efforts and determination. Some people never bother to think of it while others manage to save a lot. If you are a type of person who actually manages to save enough money you also need to purchase adequate insurance which includes both life insurance and health insurance. Let us understand this with the help of an example.

Rohan is salaried employee with dependent parents and draws a monthly salary of Rs 30,000. After finishing all his expenses every month he saves Rs 5000 in a bank recurring deposit and Rs 5000 in an ELSS. After three years he has a good amount of savings. However tragedy strikes unexpectedly and he is diagnosed with cancer. As he does not have health insurance he has no option but to use his break his recurring deposit and surrender the ELSS to arrange funds for his treatment. As we can see from the above example saving can be useless without adequate insurance. If Rohan had taken adequate health insurance cover earlier, it would have taken care of his treatment costs and his savings would have remained intact. Also now he cannot take a life insurance policy because insurance company would reject his policy on medical grounds. Always remember any financial planning is incomplete without adequate life insurance and health insurance.