Buying confidence with insurance

confidence, Fear, Insurance, Leverage, Risks

FEAR is generally caused by the unknown. What you are not sure off causes you to be uncertain. When you are uncertain you get fearful about the outcome.

Earlier I always used to talk about how investments would lead you to have the confidence to take the risks of life without being fearful .

However I have recently started analysing different kinds of risks that I face – so as we grow older, medical costs is a big issue. Next I have only one house in which I presently live – so there’s always the risk of a catastrophe that can hit.

I actually listed at least 5 or 6 different things which are high risks, that can suddenly wipe out my savings and investments.

Based on the ideas given by Garrett Gunderson, in his book Killing Sacred Cows, I have gone about figuring out if there’s insurance available to me to cover each of those risks.

While I knew about health insurance, I didn’t know about the concept of top-up that can add a quantum leap in your coverage at a very small premium. The caveat is that you should have the base medical insurance in place. Since I identified the risk and put a value to it, I was able to identify a product which would give me coverage to that risk.

Once you can list out all your risks and start putting a monetary value to them, chances are that you may also get a company who will be willing to cover the risk for you at a price. Once you have covered the monetary value of the possible risk, then its no longer a risk.

Insurance is a different kind of leverage, you are covering a large monetary risk by paying a small premium.

Once there is no risk, the fear reduces. Once fear reduces, you get the confidence to look at bigger things and aim for them. Insurance helps you get that confidence.

Till next time then.

Carpe Diem!!!

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