Individuals associate speed with cars, sports, work, mechanics and motion. It is time they showed the same consideration in their finances.
Urgency, alacrity, speed is considered a virtue in most spheres of life. The fastest person to achieve a milestone always receives a mention. In fact, most of the game formats have been redesigned to make them faster and interesting –the T20 format in cricket, a 70-minutes hockey game reduced to 60 minutes, are some instances.
Even technology, always under pressure to outpace the last innovation, is evaluated based on the speed with which it delivers results. This is how Twitter, Instagram and Facebook have gained millions of users – for the speed with which they can relay a message.
The Fate of the Furious
What has worked wonders in sports, business and technology can also translate into success in personal life – like personal finances, for instance.
If you show speed and urgency in executing financial decisions, you will set yourself up for success over the long term.
Let’s see the fate of the fast and furious vis-à-vis the laidback.
Virat is a 30-year old business owner. He is married, has a kid. Seeing that he has familial responsibilities and certain outstanding loans that his family will have to pay off in an eventuality, he opts for a Rs 1 crore term insurance plan, with 25 year policy term.
Virat’s partner Saurav is 40-year old, married & has two kids. Saurav also decides to opt for a term plan for the same reasons – financial protection for the family. (For ease of comparison let’s assume Saurav also takes a Rs 1 crore term insurance plan, with 25-year policy term).
The annual premium on Virat’s Rs 1 crore term insurance plan is Rs 7,570.
The annual premium on Saurav’s Rs 1 crore term plan is Rs 15,928.
(Figures are for Rs 1 crore term plan of 25-Yr policy tenure. Numbers are for illustration only, please consult your insurance advisor before buying life insurance)
Saurav pays more than 2.1 times the premium Virat pays.
The only reason why Saurav’s term insurance is more expensive is because he is taking life insurance at an advanced age. The delay has proven costly for Saurav. Virat on the other hand, is reaping the benefit of acting fast and furious with his life insurance decision.
Most financial decisions like buying life insurance, health insurance and investing in ULIPs (unit-linked plans) or mutual funds are more rewarding if you act fast and buy it at the earliest.
Life insurance is very helpful in providing financial cover to your loved ones. When taken at a younger age, you can avail lower premiums.
ULIPs / mutual funds can add considerable value to your investment portfolio targeted at achieving goals like children’s education and retirement planning. But you stand to gain much more if your money is invested for longer period of time. This means you must get a headstart and begin investing at the earliest.
Luck not only favours the brave, but also those who are fast and furious with their money decisions. There is no time to lose when it comes to providing financial cover to your dependents. Calamities can strike any time and before you know you could be a victim of the #IfsOfLife. The only way to stay one step ahead is by taking financial safeguards quickly.
References in the article to films, companies, brands are only for representation purposes and we are not responsible for any misrepresentation/misuse of the same. Opinions in the article are made without mala fide intention.