Each of us is a human asset, and everyone can produce value, but our human asset also has risks. What risks do human assets have, and how can we resolve them? Let's learn together.
We all know that investment is risky, and human assets also have risks. The two risks that most affect the value of human assets are age and accident.
Risk 1: Age increase
When people are older, the labor force will decline with the increase of age. For example, after retirement, the labor force will decline, and the value of human assets will shrink greatly. So how should we deal with this risk? This requires us to insist on investment and increase the proportion of our financial assets when we have strong labor capacity. In this way, after retirement or financial freedom, we mainly rely on financial assets to provide cash flow rather than human assets.
Risk 2: Accident
Human assets are greatly affected by accidents, such as sudden illness, traffic accidents, sudden death, etc. in daily life, which will greatly reduce or even zero the value of human assets in the short term. Our human assets are relatively fragile. Even if we have rich investment knowledge, our investment may be interrupted due to accidents, even affecting the quality of life of our families. In order to deal with such risks, the state has prepared "five insurances" for each citizen to help residents avoid ordinary risks, but the amount is relatively low. Therefore, greater risks need commercial insurance to establish security for themselves. This can protect the quality of life of yourself and your family from the serious impact of accidents. In the process of investment, the fund can transform our human assets into financial assets, but this process is risky. This process requires insurance to help smooth the transformation process.
Insurance is a good tool to convert human assets into financial assets, but human assets will encounter four common risks:
1. Accidents: injuries caused by accidents in life
2. Disease: minor ailments and disasters
3. Serious disease: cancer and other major diseases
4. Death: One must die (accident/death)
No matter what kind of risk is, it will have an impact on our family assets, so insurance is to prevent accidents. We can pay a sum of money in advance. When a corresponding accident occurs, the insurance company will pay a sum of money to help us tide over the difficulties and use insurance to protect long-term investment.
The four most common types of insurance correspond to the above four situations respectively: accident insurance, medical insurance, serious disease insurance and life insurance.
Then some friends will have questions about whether the insurance company will run away after taking the money? This will not happen, because domestic insurance companies are strictly supervised by the CIRC, and each insurance policy needs to pay sufficient deposits to ensure the ability to make compensation, so the insurance policy is long-term and reliable within the validity period.
