It is never possible to predict what is going to happen in life. If we could, we would never do lots of things that we set out to do. We would, for instance, on the day of an accident, stay in bed, or before an illness has even occurred, visit a doctor. The problem is that illness can attack people quickly and without warning. It is for this reason that insurance is a good idea. It protects people financially from this unpredictable event. So, we should consider insurance, in particular the critical illness insurance pros and cons, along with other ways that the major wage earner from a family can protect those that depend on them financially.

Insurance

One way to protect your family from the unpredictable is to consider insuring against it. There are two types of insurance in this regard, health insurance and life insurance. Many people will insure against the ultimate loss but not think to insure themselves against critical illness. This leaves a family wide open to potential destitution and not being able to cope financially in the future, and with what lies ahead. It may not just be that their loved ones cannot work, but that extra money is also required to pay for their care. This is a double financial hit. The answer is that critical life insurance can be bought. For an affordable amount each month, it can cover future shortfalls in income for periods of inactivity, for however long these may last.

For more information on insurance and how it works, you might find this article useful to read.

Savings

It is a good idea not just to save for retirement but to try and put some money away in case you fall on hard times. Apart from illness, there is always the possibility that the economy will change or the demand for the type of business that you are in will change. Most of us are adaptable but it may take time to diversify or switch to another business. A lot of extra investment might be required to get that new business off the ground. A bank might be able to help, but if not, would it not be good to already have the capital put by for a new venture? It is certainly something worth considering. A small amount put aside each month, while still allowing you to live an adventurous life, must surely be worthy of consideration.

Investments

Investments are different from savings. The process or action of investing is done for profit. The disadvantage, of course, is that your money might be tied into a plan where you cannot access it for a long period of time. The good side is that you can benefit from increasing the value of your investment, but then only if the financial markets are doing well. This can be the world’s financial markets, depending on the type of investment plan that you have taken out. Investing in the stock market can have its ups and downs. As you cannot predict your future health, it is not always possible, even for the most financial of experts, to predict how other factors might affect the profitability of a company. It can, of course, help to enlist the help of a financial adviser experienced in such matters. Conversely, you could buy a financial newspaper or look at online financial news to keep yourself informed daily on changes in the world’s markets and economy. Gold might be something to invest in as it is almost as liquid as cash itself, in terms of recouping your money, and considered as good an investment as real estate.

Considering the above must give us some hope for financial security in the future. We can insure against the likelihood of critical illness affecting our future ability to continue to provide an income for our family, and if we have any spare cash, to have put it aside for extra help during an unpredicted event. The advantage of insuring against such an event as opposed to an investment is that you will be guaranteed the money should the worst happen. Whereas, with an investment, depending on the state of the financial markets at the time, you might have lost some of your nest egg.

Categories: Personal Finance

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