We always plan for the future, for ourselves as well as for our loved ones. This future planning should not only be limited to choosing the best college, the best job, and the most suitable house but should also include financial planning. The financial goals you set to achieve the plans become an important part of your life. However, it depends from person to person as to how you plan them.
Your goals and plans should run simultaneously to help you successfully accomplish the objectives that you have set. Insurance and investment plans complement your goals. Though both of these financial instruments can help you with your future goals, it is important to understand what each of these instruments offers and how they differ from each other.
Investment Plans: Pay Now and get better results later
An investment plan consists of money or assets that are given to the third party in exchange for the return of that sum or assets, along with the profit, later. Bonds, where you lend money by exchanging interest, and stocks, where your share translates to being a part-owner of a company, are the best examples of investments. While bonds are considered to be safe investments, stocks can produce a higher profit but at a higher risk with absolutely no guarantees of returns. Another option is investing in Mutual Funds, where you can invest in both stocks and bonds that are regarded as mid-risk with mid-returns. You can also choose a smart investment plan where you can invest in different places simultaneously, enabling you to achieve more than one goal at a time.
Insurance Plans: Planning for A Stable Financial Future
Insurance is a financial instrument that is bought to protect you and your family against any monetary loss. This loss could be due to an uninvited situation like accidents, illnesses, etc. There are a lot of insurance plans like term plans, life insurance plans, health plans, etc. Term plans safeguard you and your family against any uncertain incident by offering them a sum assured, health plans offer financial support against medical expenses.
Conclusion
To conclude, the discussion comes to what should be opted for. Insurance plans? Investment plans? Or both? The answer is straightforward and boils down to what you require today and in the future. Investments and insurance will look after you in the short or long run, depending on the kinds of plans you choose.
Insurance – be it a term plan or health insurance and an investment plan are both important aspects of financial planning for your future. Among the multiple options available today, you should create a plan most suited for your secure future and that of your loved ones.