The Euro 2016 final was a match worth the watch. The title favourite, France, which had been on an offensive mode, lost to Portugal, the underdogs of the tournament. Portugal's win gives us some very important life lessons, including certain financial insights pertaining especially to insurance.
Prepare for each game
Just like Portugal had a game plan for each opponent, it is best to have a financial plan to cover each stage of your life. Whether it is an unforeseen illness, a major accident or death, it is best to have tailor-made plans to tackle each of these events. And this you can do by buying insurance plans to meet your specific needs at different stages in life.
Fernando Santos refused to confine himself to short-term goals... you too need to think long term while buying insurance.
Buy a term life insurance when you start a family or if you are earning and have dependent parents -- this will help you to protect your family in the event of your death. Health insurance is a must from an early age to meet hospital expenses in case of a medical emergency; the cover should go up with age. Similarly, a personal accident policy must be purchased at a young age to cover yourself in case you have the misfortune to suffer a disability due to an accident. At a young age, one is more susceptible to accidents and hence the cover is important.
So, just as the quality of opposition and game tactics are different for each team, you need to plan for different stages of life and risks appropriately. After all, life is pretty unpredictable,
Think long term
Fernando Santos, the Portugal coach, took over the team in 2014. After losing his first match in charge to France, in the very same stadium, Santos told the players that their goal should be to return here for the UEFA EURO 2016 final. Santos was in for the long haul and he had foresight. He refused to confine himself to short-term goals such as merely qualifying for the EURO 2016. You too need to think long term while buying insurance. The real objective of the policy should be to gain long-term benefits rather than saving a few bucks in income tax in the shorter run. You must think of buying an adequate term plan cover for indemnity and keeping in mind your future income. Similarly, low-cost ULIPs should be considered for higher returns, with a long-term view. Your needs are likely to be greater and risk appetite smaller with growing age.
Play to your strengths
It isn't that Portugal had been on a winning streak that made them the champions. It is the fact that they managed to initially survive and then win the games that mattered, which brought them closer to becoming the eventual champions. Similarly, it is important to ensure that you are aware of what your exact requirement is and what your financial capabilities are.
When you are buying an insurance cover, it needs to be adequate and not ambitious to begin with. What I mean to say is that don't postpone your purchase just because you think you cannot afford the coverage you need. You need to understand your needs, calculate how much you would need to buy and then start with the best possible plan. Go for basic plans in the beginning – by that I do not mean the ones with the lowest premium but those that cover you adequately as per your needs in the beginning. Remember, your insurance policy will be your saviour in rainy days, so it is important to buy adequate cover to protect you and your family when you start.
Have the right mix
Even the best of plans can go haywire just as Portugal's coach realized in the EURO 2016 final. He responded to Ronaldo's injury-forced early departure by introducing Ricardo Quaresma, who had already outstanding contributions from the bench in earlier rounds. Later, the star player Renato Sanches was replaced by a conventional striker in Eder and the decision paid off as he scored the winning goal. This gives us an important lesson. And that is: you should not keep all your eggs in one basket.
Even the best of plans can go haywire just as Portugal's coach realized in the EURO 2016 final.
Similarly, there must be a right mix of insurance policies, so that there is always some back-up as a contingency plan. It is important to have the basics (life insurance, health insurance, car insurance) in your portfolio but it is equally important to ensure that you are protected by your different policies at all times in life. For instance, if you get disabled because of an accident, will your term insurance be of any help? In fact, worse, you might lose your job and there will be loss of income. So what do you do in such a case? Perhaps buying a personal accident policy would have helped you as they provide a lump sum if you have temporary or permanent disablement as well as provide a certain amount as an income replacement. Or let's say, you are diagnosed with a critical illness that does not require you to be hospitalized. So, will only health insurance be of much help to you? In such a scenario, a critical illness plan may just save you from draining your life's saving on treatments.
Likewise, imagine you buy a new car and only get a basic plan to insure it. But you do not buy important add-ons such as engine protection cover or a zero-depreciation cover because you feel you won't need them. However, monsoons arrive and flood your city and you realize that water has slipped into the car and your engine has been damaged. This means you will have to shell out at least ₹ 1 lakh from your own pocket to get your car repaired. But if you had bought those covers for an additional price along with your core car insurance plan, you would have been saved from spending anything for repairing your car.
So you see, just like Portugal played calculated and smart football in the tournament, you too need to play smartly as far as your financial needs are concerned. Being prepared for the future is your best bet and will cement your chances of emerging victorious in the ultimate match called life!