Two axes: the time and property you build
Every financial goal has a deadline. Insurance helps protect the way to it when life doesn't develop according to plan.
When I explain to my client what insurance is for, I don't draw products. I draw two axes. I give the horizontal time, the vertical property that one builds over time. Then we add to the picture its own goals and suddenly you can see something that is not possible from the insurance list.
The curve never grows evenly. It has a place where we break, where large amounts are inserted into it, and where it begins to depend on one single income. And it is there, not in the risk table, to know what insurance is good for.
A plan that almost everyone has
It starts at about 30. A man has something to eat, better work than five years ago, some experience, maybe a freshly completed school, and he and his partner decide to start building something together.
| Age Range | What's going on? |
|---|---|
| 30 | Something to eat, stable work, first plans together |
| 33 | Own housing, plus 10 to 20 % of own funds |
| 35 | Children, motherhood, one main income |
| 40 | Reconstruction, car, holiday |
| 50 | Children's studies |
| 65 | End of active intake |
This is not a theoretical model. It's a plan that most people describe to me at the table, just in other words and with other data. And each item in it has one common aspect: to make money at the right time.
A place where the plan is most fragile
The most vulnerable point is not in the beginning or in the design. It is around 35. The family has a fresh mortgage, in which they have put most of what they have saved up, and at the same time was born. The partner is on maternity and the second income in the household is a parent's income.
At this stage, the whole plan is up to one person. When a person gets sick or gets hurt, it's not about slowing down property growth. It's about stopping them from walking around where they pay for mortgages, food and a janitor.
And right here, there's a difference between a family that has insurance set up to its own situation, and a family that has some kind of contract from the cattle when it was alone, without kids and without credit.
The comparisons we hear most often
If I had invested the three thousand a month instead of insurance, how much would I have? It's a legitimate question and it makes sense to count it on your voice.
| Comparison | Amount |
|---|---|
| Paid for insurance for 35 years CZK 3,000 monthly) | 1 260 000 CZK |
| Same amount invested at 5 % per year | approximately CZK 3,325 000 |
| Divide, if nothing happens all the time | approximately CZK 2,065 000 |
Illustration comparison at a monthly monthly deposit of CZK 3,000 for 35 years and a model effective annual rate of 5 s, with deposits at the end of the month. It does not take into account fees, taxes or inflation. Values are rounded up; the actual yield is not guaranteed and the investment may also lose value. The insurance performance depends on the agreed cover.
Two million is a lot of money, and there's no point in pretending that it's not. If a man had a certainty that he would be healthy for 35 years and that nothing would happen to him or his property, the insurance would be a bad investment.
But no one bought that kind of certainty.
What the calculation can't count
The whole comparison is based on one assumption: that nothing will happen in 35 years, but it is enough to add one event to it and stop paying.
A year of incompetence means that income falls out and the investment does not increase at that time because it is not out of anything. On the contrary, it starts to dissolve because of something living. Invalidity makes it permanent: income falls to a fraction and the rest of the injustice that we drew at the beginning does not occur. And death at 35 means that the family has five years of savings and mortgage instead of 30 years of savings.
This is the difference that goes on. Investment is the hope of what happens. Insurance is the treatment of the hope that doesn't come true. It's not two products that compete for the same money.
And the ratio is worth it. Three thousand a month cover risks that would otherwise mean damage in millions. I've never seen a client who would regret a paid insurance policy after filling it.
Not only life: property and responsibility
When you say insurance, most people imagine life insurance, but the property curve can be brought down by something other than illness.
A flooded neighbor, a burnt-out kitchen, a car damage that you caused to someone else. From the perspective of the family budget, it's one thing if half a million disappears because of the illness or the damage you're responsible for. In both cases, it pays the same reservation that was for something else.
That's why I'm looking at all three insurance policies together for life, property and responsibility. It's not about having as little of a contract as possible. It's about not leaving a hole between them, through which something can get in that can be treated for a few hundred months.
Why am I drawing this and not counting
When I show my client the insurance portion table, he sees the expense. When I draw the two axes and his own goals, he sees something different: that every point on the curve has a date and that term is that he will walk pleasantly.
The insurance is not a separate product that is bought next to the plan. It is a condition that the plan should be completed even in the year that it did not. In 13 years, I saw enough families who had one event moved everything back ten years, and I saw the ones that had been moved a few months because they had set up what happens when they didn't.
The difference between them was not equal to the income. He was in this, if anyone drew that curve once and asked what was holding it.