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Chuks Udo Okonta
One thing common among rich people is the fear of falling into poverty. This is why most of them don’t joke with insurance, which serves as a means to prevent poverty.
From interactions with some well to do individuals, I observed that they never share the same belief with average people about insurance.
Few days back, I had a discussion with a prominent individual on deferred annuity and was shocked to hear him said he is running inflation-link annuity, which means that his investments are far above the inflationary rate.
Why the average are complaining that insurance companies don’t pay claims and other unnecessary arguments, the rich are making claims and sustaining their lifestyles through insurance.
I also learnt of a group managing director, who is investing over 50 per cent of his earning in an insurance saving product.
The rich understands the workings of insurance and take advantage of the opportunities inherent in it.
What the rich do with insurance
* Create wealth
The rich increase their wealth through investments products offered by insurance companies. They buy investments-linked products such as term assurance; life insurance; deferred annuity; takaful investment plan; esusu; amongst others to save and create more wealth.
* Risk management
They effectively manage risks through insurance by taking advantage of the concept of small premium, big coverage.
They insurance their lives and properties with little funds, which help them to solve problems that required huge funds.
* Good health care
Rich people enjoy good health care from good healthcare providers. While average people struggle with poor health conditions, due to their inability to pay bills for services, the rich pay little to enjoy first class services.
While average people outrightly lose their assets due to their inability to replace them, the rich keep replacing their lost assets through insurance.
The rich leverage insurance to leave inheritance for their families. This they do, through insurance products such as term association, life insurance amongst others.
Insurance gives the rich coverage against exposure and ridicule. With insurance, the rich manage their status perfectly as risks that would have exposed them are catered for by their insurers.
Don’t envy the rich, study their ways and means, adopt their financial planning concepts to structure your life.
Truth be told, over 90 per cent of multi-bullion dollar claims paid yearly by insurers are earned by the rich.