This is the second fundamental block in the risk management and equally important.
Why Insurance
What does insurance got to do with all this?
Well, a lot, actually!
Just imagine you are in a situation wherein you have lost your job and to add to it something happens to you or someone in the family? You will be in a major financial crisis. You have your emergency fund but what if it is not enough to help you cope?
Irrespective of any situation insurance should be a MUST. So ensure that you have your insurance in place, both, life insurance and medical insurance in the form of mediclaim. If you do have them then ensure that they are active. That is, you renew them as and when their term expires.
The above two blocks are very important to build a strong foundation of risk management. They have to be in place even before you think of any other form of savings or investments.
Once the above blocks are secured then comes the third block: Your savings and investments.
Illustration: Uttam Ghosh
Also see: How to play the markets now
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