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.
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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.
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Great initiative to address this important issue.
Thanks for addressing this issue. I have always wondered how you it works.
It makes sense also request for death proof from d next of kin before any transaction
I have a case just like this but my brother is the next of kin and he was told to visit the ministry of Justice for a letter of approval which he did,, they told him the letter will be ready within 2month after spending some amount of money to my surprise it was more than 6month and just this Monday letter was taken to bank.
Bank also are saying we should come back later for a review that we should keep checking
I like this ideas
This is a good piece of information.
Thanks for the information, can I state both my adult children as next of kin because I have been told that using one could cause a rift
Sure you can.
Very detailed and explanatory. Thanks.
Yes my name is chiamaka i have a case like this my dad use as next of kin to process his dividend to the one of the nigerian bank but now he died on august last year and we buried him three months ago as a next of kin i dont no the required document i will use to go and present to the bank to claim his money he did not write any will only next of kin he uses thanks
My mum is my dad’s next of kin, he died few months ago as a polygamist he has no will what do we do.
Quite good, love that and will update mind, nice ? being part of Cowrywise.
Great!
I have a case just like this but my brother is the next of kin and he was told to visit the ministry of Justice for a letter of approval which he did,, they told him the letter will be ready within 2month after spending some amount of money to my surprise it was more than 6month and just this Monday letter was taken to bank.
Bank also are saying we should come back later for a review that we should keep checking
I would have loved to used my mom as the next of kin but she doesn’t like using Android phone thus she didn’t have any email address,, I don’t really trust my immediate younger sister that much so I used my second younger sister I just hope it wouldn’t cause any hatred towards each other
Thanks for taking the time to explain this . Great ?