For many investors, the statement “I’ve been doing SIPs for years” has come to symbolise financial discipline and long-term commitment. Regular monthly investments through Systematic Investment Plans have become one of the most popular methods for building wealth over time. However, financial experts are increasingly cautioning that investing alone is not sufficient if the foundation of financial protection is missing.
Personal finance expert Rajeev Bansal recently highlighted a critical gap in how many people approach money management, pointing out that years of careful investing can quickly unravel when life throws up unexpected challenges. His observations underline the reality that wealth creation without protection is fragile and vulnerable to sudden shocks.
Bansal explained that he has witnessed numerous cases where investors who had built strong portfolios over many years were forced to disrupt their plans. Medical emergencies, sudden job losses or income disruptions compelled them to withdraw from their investments prematurely, often at the worst possible time. In many such situations, insurance had been treated as an optional add-on rather than a core component of financial planning.
Unexpected life events such as hospitalisation, layoffs or prolonged income gaps can undo years of disciplined investing if there is no financial buffer in place. Without adequate protection, investors are left with little choice but to liquidate their savings, derailing long-term goals that took years to set up.
According to Bansal, while SIPs are an excellent tool for growing wealth steadily, they work effectively only when backed by strong protection mechanisms. He emphasised that investing helps create wealth, but insurance plays the crucial role of preserving it when things go wrong. Health insurance and term insurance, in particular, act as safeguards that prevent investors from dipping into their long-term investments during crises.
He stressed that the sequence of financial planning is just as important as the individual components themselves. In his view, protection should always come before growth. Health insurance should be prioritised to protect both health and savings, followed by term insurance to secure income and ensure the financial safety of dependents. Only after these protections are in place should investors focus aggressively on wealth creation through SIPs.
Without health insurance, high medical expenses can rapidly drain savings and investments. Similarly, without adequate term insurance, a family’s financial stability can be severely threatened if the primary earning member is no longer around. These risks, Bansal argued, make protection an essential first step rather than an afterthought.
The broader message is not a warning against investing, but a reminder to approach financial planning in the right order. Proper protection ensures that long-term investment goals remain intact even during difficult phases of life, allowing wealth to compound uninterrupted over time.
Summing up his perspective, Bansal reiterated that safeguarding oneself against risks should come before chasing returns. Growth follows protection, and sustainable wealth is built only when both work together. His insights, drawn from real-world experience, serve as a timely reminder that while building wealth is important, protecting it is just as critical.
