In financial planning, striking a balance between insurance and investment is a vital decision that can shape your financial security.
As you embark on your journey towards a financially stable future, a crucial question may arise:
“Should I prioritize insurance or investment?”
This question warrants careful consideration, as both offer distinct benefits and serve unique purposes.
Insurance is not investment and vice versa. The goal of insurance is to protect you financially from future risks, while investment helps you to build your wealth.
In this article, we delve into the pivotal question of which should come first: insurance or investment.
Difference between Insurance and Investment
| # | Insurance | Investment |
| 1 | Serves as financial aid. | Helps you get returns on your money. |
| 2 | Serve as financial protection/coverage against uncertainties. | Grows your wealth by allocating funds to different assets. |
| 3 | Does not offer returns but financial protection against losses. | Returns on investment can be high or low. |
| 4 | Is for a specific period of time. | Allows accumulating wealth over an extended period. |
| 5 | There is no risk involved. | It involves some amount of risk. |
Should you Insure or Invest First?
To know which to choose first between Insurance and Investment, you have to identify and understand your financial goal.
In general, it is advisable to first establish a solid foundation of insurance coverage before diving into investments.
Insurance serves as a safety net, protecting you and your loved ones from unexpected events and creating a financial cushion that gives you peace of mind.
Once you have a solid insurance plan in place, you can focus on building your investment portfolio. Investments offer the opportunity to grow your wealth over time and achieve long-term financial goals.
However, it’s crucial to strike a balance between risk and reward, diversify your investments, and seek professional advice to make informed decisions aligned with your risk tolerance.
>> Take our risk assessment.
Is Insurance an Investment?
Insurance and investment are two different financial instruments. While insurance is designed to protect against unforeseen financial risks, investment is designed to build and grow wealth over time.
At what age should you get life insurance?
The younger you get life insurance, the better. Health conditions usually arise in old age, which attracts a higher rate. At age 25, you are most likely going to pay less for life insurance than at age 40.
Is Insurance a liability or an asset?
It depends on the perspective it is being considered from. From the insurance company, it is seen as a liability because they must provide coverage for the insured. However, for the insured, it is considered an asset because insurance provides financial coverage for losses.
Start investing with Cowrywise
If your financial goal is to build and multiply wealth, then your best option is to invest. At Cowrywise, we have the largest collection of mutual funds in the country and you can begin investing in low to moderate-risk assets.
Tap the card below to get started:
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I enjoyed every bit of this article. Will return for a second reading.
Whoosh!
Thank you, Edima.
Just bookmark it in your browser for easy access.?
Mobolaji no words just thank you for this beautiful piece!
The push I needed..thank you
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This was worth every minute. A real eye opener. Thank you Cowrywise!
Thanks for reading, Patience!
Thank you.
Sure doing my best to invest and save.
Wow…..I really appreciate your effort on this beautiful savings
☺️
I really enjoy reading your post. Please can you elaborate more on the design thing I do not understand it and if I want to invest for my wife or daughter, how do I go about it thank you.
Hi Oyebanji, it’s easy to invest for your wife and daughter. You can begin investment plans on their behalf with your account or use your referral code to get them to sign up. After they sign up, they can both start investment plans on the platform.
We’ll send you a comprehensive mail shortly.
Please read all about the Design Fund for women here: https://cowrywise.com/blog/investing-in-women/
Applications close on the 25th of March, 2021.
I loved every part of it. I loved how your vulnerability gave you the strength to be financially secured. Thank you so much! I took few notes I will work on.
Awesome! ??
Long but worth the read. I will spend my money better now. I will save and I have just been pushed to invest more than I ever have. Thanks for this piece.
Thanks for reading, Rhoda!
Please can you write every article on the INTERNET!!! This was so relatable yet so informative I felt like I was talking to a friend !!!! I love you already !!!
? Thank you so much, Obianuju.
Insightful!!! I enjoyed how you “gisted” the knowledge.
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Nice article.
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Just what i needed, thank you!
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Beautiful write up.
The “do not eat tomorrows yam” hit the hail harder.
Thank you cowrywise for the many beautiful contents.
Thanks for reading as well, Victoria.
Thank you so much for sharing. I especially love how you delineated the plan to create the plan. Thank you really. This has been so helpful especially at this crossroads I find myself.
So glad it helped.
Wonderful I enjoyed the article
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This is archive worthy. Something you screengrab and then go back to everytime you loose guard
Whoosh! ?
Thank you, Amal.
I tell you
This was lengthy but encompassing, thanks for writing
Thanks for reading, Faith…
Factory setting occurred in my brain. Thank you sir.
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Wow!!! Love this Piece. Truely from a reset brain.
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This is an amazing write up and yeah, an eye opener. And I love the fact that it’s so relatable with the small small vernaculars, lol, e long but e sweet.
“e sweet”!
Haha. Thanks Folajimi
This is proper financial advice. You have mapped out s lot of strategies that will benefit me financially if properly applied as a young professional. Thank you for the sound advice, Mobolaji.
Awesome content! Great push! Thank you very much ma’am ❤️❤️❤️
Nice piece. Really inspiring to me even as a man.
What a nice article .???. You did a great job ma
I want to give you loads of hugs. Your post today couldn’t have come at a more better time. This post reminded me of Andy Mineo’s quote on Vulnerability…It draws people in closer to say ‘me too’. This was certainly the energy booster I needed after running numbers today.
I really enjoyed reading this. I’ll share with the teen girls I mentor. Thank you so much.
Such an insightful piece! You’re a good writer Mobolaji!
Thanks for sharing.
Thank you Mobolaji. Thank you very much.
Thank you for providing the materials needed to build a good financial culture.
Insightful and relatable!
You rock!!!!!!!!!!
Deep stuff, useful to both men and women alike!
Thank you for sharing!
I feel like saving this write up somewhere to be reading every month…If I hear say na for women alone…Thank you so much for sharing.
Thank you very much for this,
It is very relatable,
Every woman ought to be financially stable to avoid stories that touch,
Thank you once more.
I’m really touched by this guidelines and I see myself becoming greater from this piece ❤️
I enjoyed this article. Every line and wors spoke to me. Thank you so much, i really find this inspiring
I really enjoyed this article , thanks so much
Thank you so much for this❤️
I look forward to implementing what I learnt and reading more of your articles
This Uplifting article is just what I need as a Student who’s trying to be money-wise. Thanks, I’ll be sharing this.
This is really so insightful. Thanks so much, Mobolaji. I’ve got a new perspective
Thank you so much For the piece. May God help me to invest.
Thank you for this piece, I have taken a different path now to wealth creation, but do you or cowryrise offer mentoring programs?