The greatest reluctance comes when we are asked to take a decision to buy into a financial plan.
It is multiplied when the plan is one of life insurance or deferred annuity. Procrastination is a result of this reluctance. Why are we reluctant to buy such plans despite knowing that they are wonderful financial packages?
The answer lies in knowing how we view the proposal. When presented with an option of either a life insurance policy or a deferred annuity, we look at it as a “Purchase”. Purchase is related to “Paying” which means money going out of your pocket. The mind immediately correlates these and the natural conditioning of our brain tells us to be “cautious” and thus the reluctance and procrastination.
Financial decisions, especially the good ones can be taken only if we consciously over rule the natural tendencies which are programmed into us. The answer then is to look at these financial plans such as life insurance and deferred annuities not as “Purchase” but as “just a capital transfer”.
What does it mean?
It means, the actual act you are doing is shifting your already existing money from one place to the other. For Ex. You may keep money in your savings bank or a fixed deposit, or a chit fund or a mutual fund. By opting for a life insurance plan or a deferred annuity all that happens is the money lying in those instruments mentioned above is getting transferred and that’s about it. You are not “Paying” and your cash is not “Outgoing”. The cash is intact but in a different place.
When the transfer is justified for a substantial future benefit then you might just as well do it as time is of essence.
“Nobody ever in known history have become poor or felt bad for having a life insurance policy with a large savings accruing or a deferred annuity building a “huge” corpus awaiting to pay you an income till your life and beyond.” It becomes even better when the huge cheque of maturity benefit comes your way or a monthly income cheque from your annuity.“Remember, your biggest single income can come from only either by way of sale of a property, or a life insurance maturity.” Well, lottery is another thing.. but you know, one has to get really lucky for that.
Capital transfer helps to work our money in a better way if we change our view on life insurance and deferred annuities as capital transfers and not as a purchase.
If you have put off any decisions for capital transfers, please go ahead and do it right away..
After all… it’s just a capital transfer.