Covid-19 brought several changes to day-to-day lives. These include every aspect of human life from healthcare, employment, traveling, education, shopping, and festivities. But a major hit was on the family’s finances, especially the investment planning. Read on to more about the changes that investment plans had post covid-19.
Investment Planning
Investment planning deals with the systematic study of all the aspects of an investment plan. It begins with the initial step of finding the best investment plan itself and then moves forwards with the help of your budget. Investment planning then helps find the best investment plan within a category of plans and know it in detail.
The remaining focus of investment planning is then on the functioning of the selected investment plan and how it favorably or adversely affects your existing finances. The major benefit of investment planning is that it gives you a scope of investing in investment plans even with a limited income.
Investment planning considers many factors such as income, expenses, necessary savings, backup funds, and unexpected expenses to find a final figure. If you invest only this amount, there won’t be any issue related to money depleting due to purchasing plans outside the capacity.
Effects of Covid-19 on the Investment Planning in India
The average treatment costs for covid-19 were INR 5000 – 15000 per day based on the region. This increased more so for ventilator treatments and oxygen supplies. And because the duration of treatment can increase based on the age and pre-existing conditions of the patient, the total hospital expenses skyrocketed.
These healthcare costs were so high that they depleted the entire life savings of several people in the middle class and pushed them down towards debt. And even if the financial position was good, the medical expenses carved out at least a few months, if not years, of income. Read on to know how these high expenses affected some of the investment plans in India.
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Health Insurance
In India, almost 514 million people had one or the other form of a health insurance policy as of 2019. Some people purchased health insurance plans, others got it from their employers, and some had health covers in their life insurance policies. But most of these plans were from government policies and schemes, so their insured sum was lower, almost around INR 1 to 2 lakh.
The existing health insurance plans didn’t stand a prayer against such hefty expenses of covid-19. As life insurance policies are not as popular as life insurance policies and due to their no money back policy, the insured sum for most people was not more than INR 10 lakhs. And even INR 10 lakh proved to be insufficient in several cases.
So, people changed how much insured sum they wished to have in their insurance policies. There was a surge in the insured sum and specific covid-19 insurance plans from almost all insurance providers in the country.
Stock Market
The stock market also saw a huge dip on the verge of covid-19 peaks. So, people became more cautious about the investment portfolio and the total investment amount in shares. Share values of banks, pharmaceuticals, financial institutions, online services, etc., saw a surge. At the same time, products dependent on travel and transport saw a huge decrease in investors and share prices.
Banking Products
Banking products also saw major changes due to covid-19, including decreased purchasing, early withdrawal, lower interest rates, and lower investment amounts. But after a few waves, when the market stabilized, these affected items started improving.
Conclusion
These extreme changes in the investment planning caused by covid-19 are evidence of how vulnerable personal finances are to outside effects. The best way to prevent this vulnerability is to invest in higher returns providing investment plans. And what better investment plan is there, like insurance plans that also provide the extra benefit of a life and health cover. They provide benefits to the investor and the nominee, thus proving to be an excellent all-rounder.
