Ardea Investment Management’s Post

Really differentiated view on the 'style' of returns for fixed income investors.

✨𝗨𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱𝗶𝗻𝗴 𝘁𝗵𝗲 𝗧𝗿𝗮𝗱𝗲-𝗢𝗳𝗳𝘀: 𝗜𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝘃𝘀. 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁✨ 👋 Hello folks, In today’s world, it seems like everyone is advocating for personal insurance as a must-have for navigating through tough times. Let’s take a moment to explore the real purpose and need for personal insurance while contrasting it with personal investment options. 💡 𝗣𝗲𝗿𝘀𝗼𝗻𝗮𝗹 𝗜𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲: The primary purpose of personal insurance is to protect individuals and their families from financial losses due to unexpected events. In return, the insurance company charges a regular premium. The real need here is security against potential financial pitfalls. At this stage, it is important to note that compensation from the insurance company is only available in the event of a loss. 📈 📈 𝗣𝗲𝗿𝘀𝗼𝗻𝗮𝗹 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁: Alternatively, individuals can consider implementing their own investment strategy, setting aside an amount equivalent to their insurance premium. This approach involves analyzing various financial instruments, such as stocks, mutual funds, fixed deposits, government bonds, indexes, and more. 🔍 𝗣𝗿𝗼𝘀 𝗼𝗳 𝗣𝗲𝗿𝘀𝗼𝗻𝗮𝗹 𝗜𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 (𝗖𝗼𝗻𝘀 𝗼𝗳 𝗣𝗲𝗿𝘀𝗼𝗻𝗮𝗹 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁): 𝗜𝗺𝗺𝗲𝗱𝗶𝗮𝘁𝗲 𝗖𝗼𝗺𝗽𝗲𝗻𝘀𝗮𝘁𝗶𝗼𝗻: In the event of a loss, personal insurance provides compensation right away, while personal investments require time to realize returns through compounding effect. There’s inherent risk in investments at the initial stage. 𝗥𝗶𝘀𝗸-𝗙𝗿𝗲𝗲: Personal insurance is more straightforward and risk-free compared to investments, which carry varying levels of risk based on strategy and market conditions. 🔍 𝗣𝗿𝗼𝘀 𝗼𝗳 𝗣𝗲𝗿𝘀𝗼𝗻𝗮𝗹 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 (𝗖𝗼𝗻𝘀 𝗼𝗳 𝗣𝗲𝗿𝘀𝗼𝗻𝗮𝗹 𝗜𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲): 𝗙𝗹𝗲𝘅𝗶𝗯𝗶𝗹𝗶𝘁𝘆: Investors have the freedom to use their funds as needed, unlike personal insurance, which only pays out in case of a loss. 𝗨𝗻𝗹𝗶𝗺𝗶𝘁𝗲𝗱 𝗥𝗲𝘄𝗮𝗿𝗱𝘀: With personal investments, rewards can be substantial depending on the investment strategy, whereas insurance payouts are capped at the sum assured. Please note that this analysis aims to present both sides of the coin: Personal Insurance and Personal Investment. It’s not about discouraging insurance but rather offering a new perspective on personal finance! Let me know your thoughts on it? 💭 #PersonalFinance #PersonalInsurance #PersonalInvestment #Insurance #InvestmentStrategy #FinancialLiteracy #RiskAndRewards #WealthManagement #FinancialPlanning #RiskManagement #WealthBuilding #InvestmentPlanning #InsuranceAwareness #FinancialEducation

As we navigate through 2024, Wellington Management's "Insurance Multi-Asset Outlook" highlights the key strategies that could shape success for insurance portfolios. With potential for equity market gains and a favorable backdrop for fixed income, their analysis is a must-read for anyone looking to capitalize on the opportunities and mitigate risks in the months ahead. Download the report to get the full picture. https://lnkd.in/gCJ_W4aZ #InsuranceAUM #InvestmentStrategy #MarketOutlook #InsuranceAssetManagement

📊 Understanding the Importance of Insurance in Personal Finance 🇮🇳 In today’s uncertain world, insurance is not just a financial product—it's a crucial component of sound personal finance management. At MyInvestBuddy, we believe that understanding insurance can empower individuals to secure their financial futures. 🔑 Why Insurance Matters: 1. Risk Mitigation: Life is unpredictable. Insurance helps protect you and your family against unforeseen events, such as accidents, illnesses, or natural disasters. 2. Financial Security: A comprehensive insurance policy can provide financial support during challenging times, ensuring that you can maintain your lifestyle even when faced with adversity. 3. Investment Growth: Certain insurance products, like ULIPs and endowment plans, also serve as investment tools, combining protection with wealth creation. 4. Tax Benefits: Under Section 80C of the Income Tax Act, premiums paid for life insurance are eligible for tax deductions, making it a smart financial move. 🌟 Choosing the Right Insurance: It's essential to evaluate your needs and select policies that align with your financial goals. Consider factors such as coverage amount, premium affordability, and the insurer’s reputation. At MyInvestBuddy, we encourage everyone to take a proactive approach to personal finance. Let’s prioritize securing our financial future through informed insurance decisions! #PersonalFinance #Insurance #FinancialLiteracy #MyInvestBuddy #IndiaFinance #WealthManagement

Other Roles Insurance Plays in Wealth Creation ✅️Limited investment features: Some insurance products have investment components (e.g., whole life insurance with cash value). These offer potential growth, but the returns are often lower than other investment options, and fees can be significant, reducing overall growth. ✅️Not a primary wealth-building strategy: Insurance should be considered a crucial part of a *risk management* strategy, not a primary wealth-building strategy. It's a safety net, not a vehicle for active wealth creation. In short, insurance is a vital component of a comprehensive financial plan that can *protect* and help *preserve* wealth for future generations, but it shouldnt be relied upon for building generational wealth. A diversified approach encompassing investment, savings, and strategic financial planning is generally needed to achieve that goal. 🏆💯The above is the popular opinion but we have modified our policy to take care of the customers needs to create generational wealth. It's always a win 🏆 ✌️ 💪 Heirs Insurance Group. At Heirs Insurance we offer both Savings and Insurance policy's plans e.g #HeirsSave #HeirsTriplepay #CoupleSave #MyHeirsPlus #InvestToday Olayiwola Tijesuni Financial Advisor

Insurance is not an investment, but it can still diversify your investment portfolio. Wondering how? Let me tell you a short story. Sheetal’s husband died in a car accident. He had made investments in mutual funds & stocks but a major investment was in buying their house. He was still paying EMI for the house. But, he had taken huge business loans and Sheetal had no active income at the time of his death. The creditors moved to court to settle their claims and all the investments & house were gone. There was only one thing that creditors could not take from Sheetal: Life Insurance claim. This was only because her husband took the policy under Married Women’s Property Act, 1874. Coming back to our question, here’s how insurance can diversify your portfolio: ✅ Investment takes care of your wealth creation journey but does not cover your financial risks. ✅ Even if you invest in different asset classes like gold, equity, debt and real estate, all the markets will not be at peak at the same time. So, if your financial risks are not covered, you have to sell your investments at a loss. ✅ Most of Warren Buffet’s wealth came after the age of 65. That’s because compounding shows wonders when you stay invested for the long term. So, selling your investments to meet emergencies is a bad option. ✅ Your financial goals can take a toll if you have not bought insurance with ideal coverage. Do you still think insurance does not diversify your portfolio? Share your thoughts. #insurance #portfolio #idealcoverage #diversification #insuranceadvisor

Everybody needs a bit of boring in their portfolio. Why? Superior portfolio performance. Ernst & Young released a retirement study that stunned me. They concluded that: - Permanent life insurance loans improve market returns by acting as a buffer against market volatility - Permanent life insurance provides superior returns over fixed income in long-run scenarios - Term insurance premiums act as a drag on portfolio performance Whole life insurance is the best boring money can buy. Any competent Financial Planner can tell you that - but I'm surprised at how little this is talked about. So what are the benefits of whole life insurance? - Guaranteed premiums - Guaranteed policy death benefit - Living benefits (tax-deferred cash value accumulation, tax advantaged access to policy cash values) Is this going to be the driver for your wealth building? Likely not. But every wealth caddy needs a good putter. It's an oversight to not have some boring in your portfolio. I see lots of excitement around VUL, IULs, etc. Are these bad products? No. They just don't have the same guarantees. Term insurance is great - but it's not the best tool for lifelong protection. Whole life is not an investment vehicle. It's an asset protector, safety net, wealth building tool, and even a line of credit if needed. Unlike term insurance, the pricing won't change. Even if you have a health issue. Does this make sense for you? You can find out here: https://lnkd.in/eEJHgn-a Listen to the experts, not the bloggers. #Finance #Finances #Money #Wealth #PersonalFinance

Insurance and investment mixed? DON'T! Since the 1990s, insurance products called unit links have experienced a boom and sold well. Many members of the public have purchased this product, which is considered compact and simple, hassle-free. Buy 1 product that contains 2 elements: protection and investment. Like coffee sachets plus sugar, and just brew and enjoy. Easy right? All life insurance companies are competing to sell this mixed product, some even no longer sell true insurance products, namely term life insurance or what is called term life. Why are insurance companies keen to sell unit links? Nothing other than because it is very profitable. As a true insurance practitioner and financial planner, we really understand insurance products to protect against uncertainty due to risk. While investment products have risks. So when mixed, it is actually like mixing oil and water. We want you to buy an insurance policy that suits your needs and profile, so that insurance will be beneficial for you and your family. #riskofinsurance #insurancedispute #insuranceinsightchannel

2023 P&C Industry Investment Highlights: Treading the Upward Path! Following a significant increase of 64 basis points (bps) in book yield in 2022, the P&C insurance industry’s book yield climbed another 54 bps and reached a new high of 3.85% in 2023. Read more in our latest issue of Perspectives: https://hubs.ly/Q02H4WPj0