In Ukraine, on average, there is an accident every three minutes, one person is injured every 15 minutes, and one person dies every three hours.
There were 168,107 accidents in 2020, 3,541 people died, and 31,974 people were injured, according to theMinistry of Internal Affairs. These statistics are horrifying :(
Can we prevent this from happening to us?
Probably not. However, we can make sure that we have financial support in such a situation.
And as always, we have at least two options: to create our own reserve fund or to use the services of a reliable insurance partner by entering into a life and health insurance contract. Today we will consider all the pros and cons of each option. By the way, you will also be interested in reading our blog about financial literacy, where we talk about the need to create a reserve fund.
How does a risk contract work?
Imagine a simple situation: 35-year-old Serhiy works as a taxi driver, supports his family, and pays a mortgage.
Last week he slipped and broke his leg. For some time, possibly quite a long time, he will not be able to work. However, Serhiy has a life insurance contract, so the insurance company will make a payment that will support the family while Serhiy recovers from the injury and can return to work. Sounds good, doesn't it?
The cost of an ordinary fracture can cost 10,000-15,000 hryvnia, and in the case of an Insurance Contract, the company can make much larger payments. It all depends on the sum insured that the client chose in the contract. There was such an example on the insurance market when an insured person broke his little finger while playing squash, and he was paid 500,000 hryvnia. In this case, the client not only covered the treatment costs, but also received good compensation for moral damages. :)
By the way, as for how much health can cost, we recommend watching our video:
There are many things that can be considered an insured cases under the contract: injury, illness, loss of working capacity, hospitalization, rehabilitation, resuscitation, etc. These are the very cases that can happen to anyone and require financial expenses. For this money, the insured will be able to take a break, be treated, recover, and his family's life will remain at a decent level during this time.
No matter how you don't want to talk about it, the worst can happen. It's scary to think about, and even scarier to leave your children and loved ones without a livelihood. In this case, a responsible person who has an insurance policy will ensure a stable future for their loved ones.
Why is an insurance contract better than a cash reserve fund?
Don't get me wrong, we are in no way discouraging you from having a reserve fund at home.
Such readily available funds should definitely be there, because situations can happen not only with life and health, but also with cars or housing. Although ... and in these cases, insurance will help you. Personally, I have everything insured in my family - car (including CASCO), property and most importantly - life and health of all family members. This allows me to have peace of mind and confidence in the future. Therefore, you can focus on more ambitious plans and their implementation.
However, let's talk about why you shouldn't keep your entire reserve fund at home.
It is believed that the optimal size of the financial safety net is 6 monthly budgets. That is, the amount that must be set aside and not spent on other needs is equal to half a year's earnings of the family. For example, the family's budget is UAH 20,000/month. The reserve fund should be UAH 120,000. Putting aside 10% of the salary every month, the family will be able to create a reserve fund in 5 years. A long time, right? And if something happens earlier?
In addition, if part of the reserve fund is used, it will be necessary to replenish it after the situation normalizes.
Let's consider another case: wouldn't it be great to have a reserve fund not for 6 months, but for 2-3 years? Of course, great! But how long does it take to accumulate it? And is it advisable to accumulate such amounts in cash? After all, all the gurus of financial literacy assure us that the reserve fund cannot be spent, that is, this money will lie and depreciate? And although a reserve fund formed for several years will strengthen the family budget, it is not advisable to keep such amounts of money at home, it is better to direct them to savings or investments.
And in order to ensure a financial safety net for several years in advance, a life and health insurance contract will just come in handy. For example, under the "Formula of Health" or "Doctor TAS" program. To receive insurance coverage of UAH 360,000 (reserve fund for three years), you need to pay only UAH 600 per month (the cost is calculated for our 35-year-old Serhii, whom we talked about above). It would have taken much longer to accumulate this capital on his own. And one more pleasant thing - you get insurance protection immediately, after paying the insurance premium. Isn't that great?
And insurance under the "Doctor TAS" program (basic package "Ukraine") will cost 130 euros per year with an insured amount of 300,000 euros. Well, tell me, does each of you have this amount of money under the pillow? If not, then there is no need to delay.
So, the advantages of a life and health insurance contract:
- You receive financial protection right here and now, without waiting for a sufficient amount to accumulate.
- The insurance coverage significantly exceeds the amount of money paid for insurance.
- Insurance payments will allow you to cover medical expenses and support your family in difficult circumstances.
- After a payment for one of the insured events (for example, in case of injury), the contract does not cease to be in effect and continues to protect the life and health of the policyholder.
Creating a financial safety net is a priority in personal financial planning. And a life and health insurance contract is a great way to get started today!
