Earlier, our ancestors used to work throughout their old age to run a big family. But, if we talk concerning the current generation, they believe in earning smartly and living peacefully after 50.
Let’s suppose that you reached your employment saturation at 55, but your hands and bank balance speak vacuum. Will you be able to enjoy your life as you dream?
That’s why wealth creation and savings are essential. This blog will educate you regarding:
- What is the importance of wealth creation in the long run?
- What are the steps to create wealth?
- How is life insurance a beneficial way to wealth creation?
Importance of Wealth Creation
“When money realizes that it is in good hands, it wants to stay and multiply in those hands.” ~ Idowu Koyenikan.
You may dream of owning a bungalow, luxurious car, studying from abroad, and living the best of your life but are these things possible without money?
The answer is undoubtedly no, and the solution is only one – wealth creation and savings.
When you are young, you can build yourself in such a manner where you can wear multiple hats in one and earn like a wizard. And, this is the right age where you should ideally start thinking about different measures of wealth creation.
Wealth creation is essential because:
- You need money to live a decent lifestyle, not only for you but also for your loved ones.
- For unwelcomed health and other family emergencies.
- Happy additions in the family such as childbirth and marriage.
- Want to have peaceful retirement planning.
- Invest and begin a new business
What are the rules of wealth building?
The foundation of wealth building stands on the firm pillars of:
They look like straight rules but are hard to follow because not everyone follows this flow. While some earn, save, and give birth to passive income. While some earn and spend blindly because they believe in the ‘You, Only Live Once’ principle and buy expensive things they assume to be necessary.
If you move according to my guidebook, then one should start wealth creation after 2-3 years of earning (especially in their early twenties). It is the age where you have the zeal to work and handle pressure and sleepless nights.
Once you have started to earn rightly, you should save, spend, and invest wisely.
For example, buying a smartphone worth 1 lakh can wait but purchasing life insurance at the right age won’t. Money management is lacking in our Indian educational curriculum. It is why Gen Z lacks understanding of the importance of wealth creation, saving, and wise investing.
Instead of wasting money on a luxurious product, you can invest in stocks or purchase life insurance that could pave the way for a better tomorrow.
If you invest at the right place, one can reap the apt profit when they need it the most or after retirement.
How to create wealth?
There are multiple ways for wealth creation, and they are as follows:
Wear multiple hats & earn from several sources: At once, a person can perform various tasks such as – content creator, photographer, copywriter, and editor. You can work as a full-time employee, a freelancer, or take up projects on a contractual basis. Being young means having a load of fun and exposure, but it also means burning the midnight oil to be a brand for oneself and earn in INR or foreign currencies sitting at home.
Life Insurance: For some, life insurance is an added jewel, while it is necessary to own a digital wallet in the digital payment era. There are several forms of life insurance available on the market to meet the demands of a wide range of people. And, one should always have a clear idea about their monthly and yearly expenses to invest in a life insurance plan that would suit your pocket and cover the unwelcome costs.
Investment: Life is all about earning, saving, and wise investments. Investment has become highly important in today’s life because passive saving is not the right intelligent savings. The young earning population is entering the world to become self-sufficient by investing in the stock market. The younger generation is all about taking the risk, wisely investing, and reaping profits.
Minimise the expense when needed: Living a modest life is beneficial in many aspects, especially if you desire to accumulate riches. One must understand when to stop and prioritize the purchase cycle based on necessity.
Here one can say that we earn to spend. It is correct but to have a smooth and wise sail for the long term; one needs to restrict and lead a balanced life to be happier and financially sufficient when you are set to retire.
Best Life Insurance to buy for Wealth Creation
I know there are ample life insurance options in the insurance market but, I have brought you some best-handpicked life insurance policies that one can use as per their changing needs and pocket strength.
Types of life insurance policies are as follows:
- Term Insurance
- Unit Linked Insurance Plan (ULIP)
- Health Insurance Plan
- Endowment Policy
- Child Insurance
- Money-Back Insurance Policy
- Retirement Insurance Policy
All of them differ as per their need. Therefore, some of the best life insurance plans that one can consider buying are as follows:
Aditya Birla Sun Life Insurance Life Shield Plans
How would you feel when you get to know that ABSLI offers 8 different plans under one term insurance plan so that you can safeguard your family in a customized manner?
Yes, this unique term insurance plan by the Aditya Birla group has 8 options:
- Level Term Assurance
- Level Term Assurance with Waiver of Premium (WOP) Benefits
- Increasing Term Assurance
- Increasing Term Assurance with Waiver of Premium (WOP) Benefits
- Decreasing Term Assurance
- Decreasing Term Assurance with Waiver of Premium (WOP) Benefits
- Return of Premium
- Return of Premium with Waiver of Premium (WOP) Benefit
This plan gives you the freedom to select from eight alternatives based on your family’s needs, ensuring that they do not have to compromise their lifestyle and other necessities even in your absence.
Features and benefits of this term insurance plan are as follows:
Death Benefit: If you die within the active policy term, the death benefit will be paid to your nominee. And, once the death benefit is paid, the insurance will be canceled.
Waiver of Premium: All future premiums will be waived if the life policyholder suffers from complete and permanent disability or a severe illness during the policy period. Therefore, the policy’s death benefit will not be altered.
Joint Life Protection: Under this benefit, it covers two lives, namely you (primary life insured) and your spouse (secondary life insured), under the same policy. Here, the relevant Sum Assured for your better half will be equivalent to 50% of your applicable Sum Assured.
This option is available to you if you select Option – 1, 2, 3, or 4. Also, it does not allow for the selection of a rider.
Enhanced Life Stage Protection: As an individual grows older, additions are bound to happen, such as marriage and childbirth. Here, your responsibility increases because your circle is expanding. This feature under this term insurance plan helps one expand coverage on each event without undergoing a new medical check.
To read more about this customizable term insurance plan, click here.
Aditya Birla Sun Life Insurance Wealth Aspire Plan
Under this Unit Linked Insurance Plan, you have four types of investment options, and they are as follows:
- Smart Option
- Systematic Transfer Option
- Return Optimiser Option
- Self-Managed Option
Features and benefits of this ULIP plan are as follows:
If we talk in terms of entry age, you have two options-
Death Benefit: Under the classic Option, if the life insured dies while the policy is active, the insurance company will pay the nominee the larger of either the basic fund value as of the day of death notification or basic sum assured
Moreover, the insurer shall pay the greater of the top-up fund value as of the date of death notification, if any, or assured top-up sum.
Surrender Benefit: You can surrender your coverage to us at any moment throughout the policy term if an emergency arises. Such surrenders will be dealt with under the Policy Discontinuance section of the sales brochure.
Maturity Benefit: Under this benefit, you will receive the basic fund value plus the Top-Up Fund Value as of that date at the end of the term.
There are multiple ways for wealth creation, and life insurance is one such measure. Before taking any decision, one should have a good idea about their expenses to choose the right plan. It would be better to consult a financial advisor for better clarity.