- Considering insurance as an investment product
- Choosing to receive returns which are even below the inflation rate
- Exposing themselves to their life’s goals being missed owing to low capital formation in such plans.
- Wealth being destroyed rather than be made.
- They are buying into something which is not liquid at short notice. Hence, in times of emergency they may not have the necessary funds at their disposal.
- They have opted to expose their family to financial uncertainty in the event of their unfortunate and untimely demise.
- Exposing their family to financial distress in the event of their untimely death.
- They choose to pass their liabilities (if any) to their surviving spouse and children.
- They force their family to change their lifestyle upon his death.
Not buying sufficient Health Insurance
- I am still young & healthy. So why waste money on health insurance.
- Will buy one when I cross 40—the ideal age to buy health insurance.
- It is likely that their entire wealth or a major part of it might be wiped out in times of a medical emergency in future. (Read:- health insurance is wealth insurance)
- Cost of treatment continuing to rise, while upper limit of cost of all major surgeries and medical conditions being fixed by health insurers; they are exposing themselves and their families to severe cash crunch in case of a medical emergency in future.
Undertaking Long term liabilities
- Should the future turn out to be any different from what they had anticipated, they are sure to have a struggling life.
- They might as well forget about peaceful and financially secure retirement, since they will not have accumulated significant wealth so as to retire with regular cash flows.
- Today’s gain, tomorrow’s pain.
At the end of the day, you always choose something in your life out of the decision you make. This is true for all the aspects of life, including your financial life. So understand that you are fully responsible for what you get and not your accountant, your financial advisor etc.