The Ukraine-Russia conflict could impact your finances. Here’s why

The last two years have been full of upheavals, due to the occurrence of the Covid-19 pandemic. The struggles have been tumultuous at all levels — be it physically, mentally, or even financially. If that wasn’t enough, the recent Ukraine-Russia conflict has shaken the global stock markets and induced panic among people. Personal finances previously took a hit during the many waves of coronavirus, and this news has further accelerated the anxiety of people. Financial uncertainty seems like the reality today, and it may get even more turbulent in the future.

Even as businesses are all set to get a head start again, the hope of economies witnessing recovery in the near future seems like a far-fetched dream. It appears like we have gone a step back yet again, since the catastrophic geopolitical event has sent the prices of major commodities skyrocketing. But even at this point, it is essential for investors to refrain from panicking and find solutions to safeguard their wealth.

Before we suggest some best practices to stay financially protected during these times, it is important to understand why any shift in global economies can impact your finances.

Here’s why your finances have taken a hit

Even before economies could recover from the horrors of the pandemic, they have found themselves in yet another crisis — the Ukraine-Russia war. Multiple nations and organizations have imposed sanctions on Russia and the restrictions are likely to have far-reaching effects on the global economy.

Food and energy prices have witnessed a surge in the last week, thereby adding greater pressure on policymakers to increase the price of petrol and diesel. Although the fuel prices are yet to see a spike in India, the likelihood of its occurrence can’t be overlooked.

It is also essential to understand that under such circumstances, inflation rates also increase and impact the profitability of businesses. Markets are exposed to high levels of turbulence and investors run the risk of losing money. On the other side, higher prices of commodities are also likely to impact your disposable income.

Besides, with stock markets taking a hit and prices of crude oil rising, gold has also been under the scanner. We are very much aware that gold is considered one of the safest investments, but the commodity advanced to the highest level in more than eight months.

At this juncture, it is essential to watch out and make smart investments to secure your wealth in every possible way.

Best practices to safeguard your wealth

Reassess your financial goals
The foremost step is to take a look at your financial goals and make decisions, based on the current situation. Ensure that your financial goals are in tune with your investment portfolio. It is quite likely that some of your investments may have taken a hit due to the current Ukraine-Russia conflict. So, consult your financial advisor, or decide if you need to hold or switch your investments.
Review your portfolio performance
You may have a diversified portfolio but it is still likely that you may have not reviewed it for a long time. It is now the right time to look at it, considering the prevailing market conditions. Check and see if certain assets are unnecessarily causing you risk, and in turn, impacting your portfolio negatively. Try and figure out the consistent underperformers and make judicious decisions.
Do not make quick decisions
Panic ensued, particularly after the markets went hither-thither, in wake of the current Ukraine-Russia geopolitical situation. While it is quite obvious that you may want to make the best decision as soon as possible, hold your horses and think it through. Do not follow the herd and take time to figure out what you want to do. You really don’t want to regret your decision, when the markets bounce back. Also, a short decline should not lead to liquidation of your assets, but if there are certain consistent underperformers, you know what to do.
Diversify your portfolio
The best way to beat tough market conditions is to diversify your portfolio. When you invest in different asset classes, you prevent yourself from being impacted by a single asset class. Based on your financial goals, you could invest in safe options like PPF, gold, bonds, or even real estate. When you choose the right investments, and go for diversification under the guidance of a trusted financial advisor, you can stay afloat even in financially turbulent times.

You could also opt for several investment options offered by HDFC Life to safeguard the future of your finances.

Building a safety net with HDFC Life

Although there are several plans available, HDFC Life’s Sanchay Fixed Maturity plan has been designed to secure you and your loved one’s future with a guaranteed lump sum benefit. The plan offers policyholders the freedom to choose a cover on a single-life or joint-life basis.

Here are some highlights of the plan:

Single/ joint life cover: Policyholders have the option to choose their cover
Guaranteed savings with assured returns
The flexibility of premiums with single premium/limited pay/regular pay premium payment option
Option to choose from a range of policy terms up to 40 years
No medical examinations under the POS variant of the product
Enhanced maturity benefit for higher premiums
Enhance your protection coverage with rider options on payment of additional premium

Policyholders are entitled to the death benefit multiple. Under the Single Premium variant of this product, the policyholder can choose the Death Benefit Multiple (DBM) in any one of the following two ways:

The DBM for single pay will be multiplied to the single premium
For the limited pay variant, the DBM will be fixed at 10, which will be multiplied by the annual premium.

Policyholders can also avail the death benefit. The death benefit payable to the nominee under a Single Life policy shall be highest of the following:

Sum assured on death
Death benefit multiple (as chosen by the policyholder) times single premium (plus any underwriting extra premium) for a Single Pay policy or 10 times annual premium for a Regular/Limited Pay policy
105% of total premiums paid till the date of death
Surrender value applicable as on the date of death

Policyholders can also g o for riders, such as income benefit on accidental disability and critical illness, over and above the sum assured.

The last word

A fixed maturity plan is best suited for people who want to get assured returns, even in the face of uncertain financial circumstances. So, diversify your portfolio and beat the market volatility with HDFC Life’s Sanchay Fixed Maturity plan today!