Insurance Vs Investments
If one was to live long and retire with a handsome pension then there would have been no need for either insurance or investments. However in our life we encounter two major risks one is dying too young and the other is living too long
. Dying too young as a risk, which leaves the dependent family without sufficient means to live life happily; was a recognized risk. But with the advancement in medical facilities now even the average life expectancy is also increasing. One tends to live many years beyond retirements, which is a good thing, but one doesn’t want to be in a situation without sufficient money
to look after yourself well during the fag end of your life. Which is where comes the risk of living too long. With proper retirement planning
one can build a large corpus of money and protect this by buying a pure term Plan.
These two are complimentary and one must not mix the two things with one another. One should buy an insurance to take care of any eventuality and save and invest enough to create a retirement corpus.
These are complimentary things and one should avoid supplementing on with the other. Insurance is a financial planning
protection or wealth protection tool; whereas Investments create wealth