2. Insurance = Cover of Risks
Wealth creation = Income from assets.
Insurance claim Investments = Wealth creation
3. WEALTH CREATION
As it is said in Hindi ‘Khazana’. Wealth is created
from the assets that generate income.
People have many assets, but all do not generate
income.
Some assets that do, are flats given on rent,
investments, etc
4. How can you create wealth
through insurance?
Many of you maybe wondering how is it
possible to create wealth through
insurance, right?
Well, it is possible. You may not be able to
profit from insurance, but the sum assured
received on death can be used to create wealth.
Let us see how, with following example:
5. Story of Mr. Akil Malek
Mr. Akil Malek, a 36 year old social media manager,
working for one of the leading IT firms in India, has a
family of his spouse Rubina, 33 years old and 1 child,
Salman, 4 years old.
Akil has an insurance cover of Rs. 1 crore, now he is
trying to create various corpuses to fund his future
goals.
6. He starts investing through SIPs in 3 different
funds and tends to keep it for 10 years each.
After 5 yers, due to an unfortunate event, Akil is
no more. The loss is tragic, but at least the family
is financially stable with the 1 crore from the
insurance company.
But what about the future goals? They still need
to be attended to.
7. His family can use that 1 crore to continue the
investments.
So the desired corpus can be achieved, and goals do
not have to be compromised on.
This way insurance helps in creating wealth.
The above scenario is in the case of death.
8. Now we shall take the same example, with Mr Akil,
still being alive.
Insurance policies have various other benefits at
maturity like bonuses.
Akil can use that maturity amount along with the
bonuses to invest elsewhere.
Thus, creating wealth.
9. WEALTH CREATING INSURANCE
POLICIES
Insurance Companies also provide wealth creation plans
under ULIPs
Since ULIPs are linked to the market directly, the carry a lot
of risk.
There is a 5 year lock in period for these kind of policies.
This is for people who are looking for something extra,
apart from their insurance cover.
10. How can you control risks?
Avoidance: Trying to avoid situations, where
there’s risk involved. Eg. Smoking, sky diving, etc.
Retention: Saving for the occurrence of such
losses. The best example for this is your
emergency funds.
Transfer: Passing the possibility of the risk to an
insurance company, by paying a premium to
them.
11. CONCLUSION
From all the above information, there are other
ways in which insurance can be of use to us. So,
you see it is not all boring and a waste of money.
Insurance is a good product, that has to be a part
of your financial assets, to give it a good balance.
