Stock-market Versus Whole-life insurance – Is your money committed or in a relationship

Stock-market Versus Whole-life insurance

A simple relationship isn’t something very similar as being committed. A relationship is a way in which two things are connected. Relationship seeks a mutually beneficial outcome. In most case, if desired outcome is not obtained, relationship is dissolved or ended. Most individuals invest their hard-earned money with expectation that it would give them a decent return. If the investment has done continues to grow in line with their expectation, the relationship with the money continues. If investment has done fails and does not product desired gain, it’s abandoned and thereby relationship with money breaks. In contrast, a commitment is stronger than just a relationship. It’s based on guarantee, assurance, obligation, and even duty.

Regardless of future irregularities, a commitment remains unwavering and steadfast. A whole life insurance contrast is a commitment that insurer gives to the insured. Certain Government insurance companies have insurance contrasts that backed by government and provide sovereign guarantee which is highest form of guarantee which even banks fail to provide. Today, it is not common for some people to have multiple relationships, not only with their money, but in their sexual life. Unfortunately, having multiple relationships becomes complex, both legally and emotionally, due to the lack of commitment.

Few relationships can advance into commitments, but not until there is a complete understanding of what assurances, guarantees, vows, obligations and duties will be provided by each party. It is no surprise then why most relationships never attain the balance and fulfillment which only commitment from the beginning can offer. Today NIFTY and SENSEX are soaring, but many investors’ investment has not delivered the desired returns. This is a serious relationship problem as per Financial expert’s stock price is arbitrary, but value is fundamental.

As of now, most retail investors are paying premium with the hope that price will continue to go up so that they can make decent return on their investment. Price to equity ratio is popular benchmark to check if one is paying premium to a stock or buying at fair value. P/E of Sensex and NIFTY continue to remain above all time high. As of today, P/E is around 40 which is almost at 20 years highest level. Tulip mania of 1633 reminds us that bubbles do happen in market when premium goes up several folds with the expectation to make money.

Once the Tulip mania bubble burst in 1637, several lost their lifelong savings, house, business etc. Regardless of volatility, whole life insurance companies have been paying regular returns since their inception. A huge sum of claims was settled during many natural calamities such as earthquake, flood, fire, etc. Life insurance is a commitment between a life-insurance company and the policy holder. As a commitment, life insurance provides the assurance, guarantee, obligation and duty to take care of those you love and respect when you are no longer there to take care of them yourself.

There’s a large difference between a simple relationship and a commitment. Those who are committed compel themselves to provide for their own. It is their sense of duty, a source of pride and a great promise. A mere relationship, however, is primarily concerned about “What’s in it for me?” This myopic and narcissist outlook leaves both parties vulnerable, without assurance and with no sense of pride or duty.

At AssuredGain, we have noticed people who are committed, purchase life insurance, and those who are not committed don’t. At the same time, those who want to get rich quickly with investments usually overlook the value of life insurance because they are too focused on price, instead of value. The guarantees and the history behind whole-life insurance contracts demonstrate the commitment necessary to provide for the future regardless of what anomalies or irregularities may come. We always welcome those who are ready to make a commitment. At the same time, we attentively work with those who appear to be wanting a relationship…never giving up hope that they too will become committed.

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