"It is the duty of a man to provide for his family when he is no longer with them."
Life has two major financial risks. Most people only know the first one.
- Risk 1: Dying too early. (Your family suffers financially).
- Risk 2: Living too long. (You suffer financially because your money runs out).
We are so busy paying bills today that we forget to pay for our future selves. Arkad, the wise man of Babylon, saw this 4,000 years ago. He introduced The Sixth Cure: Insure a Future Income.
1. The Harsh Truth of 2026
In the old days in India, we had large joint families. If you got old, your sons would take care of you. Today, we live in nuclear families. Your children will have their own careers, their own loans, and their own struggles.
Arkad warns: "A man who, because of his youth, does not prepare for his old age, is a fool."
If you don't want to depend on your children (or the government) for money when you are 70, you must build your own Retirement Corpus starting today.
2. Don't Mix Insurance with Investment
Most Indians make a terrible mistake. They buy "Endowment Policies" or "Money Back Plans" because an agent uncle told them to.
These plans give very low returns (5-6%) and very low life cover (₹5-10 Lakhs). This is useless.
The Solution: Term Insurance
This is a pure risk cover. If you pay ₹10,000-15,000 per year, you get a cover of ₹1 Crore. If you die, your family gets ₹1 Crore instantly. If you live, you get nothing back.
Why is this good? Because the premium is cheap, and the cover is huge. This ensures your family's lifestyle doesn't crash if you are gone.
3. The Magic of NPS and SIP
To protect your "Future Self" (Risk 2: Living too long), you need assets that beat inflation.
- National Pension System (NPS): A government-backed scheme that invests in stocks and bonds. It creates a monthly pension for your old age and saves tax today.
- Mutual Fund SIP: As discussed in Cure 3, long-term equity investing is the only way to build a corpus of ₹5 Crores or more.
4. Don't Let Hospitals Wipe You Out
You can save for 20 years, and one major heart surgery can wipe out 50% of your savings. This is why Health Insurance is not an expense; it is a firewall for your wealth.
Arkad says: "Provide in advance for the protection of thy family." In modern times, a ₹10 Lakh Health Insurance policy is the first step of protection.
Key Takeaways
- Separate Insurance & Investment: Buy Term Insurance for death risk. Buy Mutual Funds for wealth creation. Never mix them.
- Start Young: Retirement planning is cheapest when you are 25. It becomes very expensive when you are 45.
- Medical Cover is Mandatory: Don't rely on your company's insurance. Have your own private Health Insurance.
Frequently Asked Questions (FAQ)
Q1: How much Term Insurance cover do I need?
A: A thumb rule is 20x your Annual Income. If you earn ₹10 Lakhs a year, buy a ₹2 Crore cover.
Q2: Is NPS better than PPF?
A: NPS generally offers higher returns (10-12%) because it invests in equity, whereas PPF is fixed at 7.1%. For long-term retirement, NPS usually wins.
Q3: What if I don't die? Term insurance money is wasted?
A: No. Do you regret not crashing your car because you paid for Car Insurance? No. You pay for "Peace of Mind," not for the accident.
Up next: Part 9 – The 7th Cure (Increase Thy Ability to Earn).
📚 Credit & Disclaimer:
This post is a summary based on the classic bestseller "The Richest Man in Babylon" by George S. Clason.
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