What You Must Know About Financial Immunity?

Financial immunity refers to being financially secure and stable, 57% of the respondents of a financial immunity survey commissioned by SBI Life Insurance revealed. While this concept of being financially secure has been prevalent for ages, it is gaining prominence in recent years, largely because of growing medical costs and uncertainties thrown up by the Covid-19 pandemic. Financial immunity has the power to reduce your stress levels and bolster your overall health. The availability of adequate finances not only ensures good mental health but aids in getting the necessary medical help to deal with varied kinds of health issues and problems. 

The SBI Life financial immunity survey also reveals that the top three worries of Indian relate to rising medical and treatment costs, the security and stability of their jobs, and health concerns for themselves and their family. And all these can be dealt with if you have built an adequate corpus through disciplined spending and wise investing.

Achieving Financial Immunity

Financial immunity cannot be attained in one day but requires a conscious and continuous effort. Here are some important steps in which you can achieve financial immunity.

• Review Spending and Save More-The first and foremost step to attain financial immunity is to re-assess your finances and expenses both. This includes an evaluation of all your spending and its relevance. Adopt zero budgeting and analyse every expense before weeding out the non-essential ones. This will help in you to save more for the rough times. And save on a continuous basis rather than doing it for a couple of months and then forgetting about it. The more you save, the better placed you are financially.
• Diversify Investments-Apart from saving more you also need to invest your savings wisely in varied instruments offering different rates of return. Diversify your investments into different investment instruments like stocks, mutual funds, property and other avenues that can be used when you require money for urgent expenses. This diversification will protect you from market-related risks while allowing you to build a kitty of funds that can be used to fund any kind of emergency.
• Buy Insurance- Another important way to ensure the financial stability of your family in your absence or if anything happens to you is to buy life and health insurance policies with riders for accident coverage or disability or critical illness cover. This will ensure that if you fall ill, your family does not have to run around to arrange the necessary funds and instead can just approach your insurance company.
• Invest in Retirement Schemes- Apart from saving for medical and other expenses, you also need to build a corpus for your retirement days. You will be quite vulnerable to health problems and have a lot of medical and other expenses to fund during your retirement period. So, ensure that you have a separate corpus for retirement that you do not use to fund expenses that come up before that.

How Much to Save and Invest for Financial Immunity?

Now that you are clear about why saving and investing is important calculate your financial immunity online or offline. This can be done with the help of identification of risks associated with your job or industry and your age, your dependents, etc. You can use a financial immunity calculator to understand your fund requirements to deal with any kind of financial crisis or setback in the future. This will require you to input your age, other details related to number of dependents, existing financial commitments and resources. The online tool can help you know your financial health and highlight the need to take further steps to build your immunity.