INVEST IN HEALTH INSURANCE STOCKS

Health insurance stocks are issued by insurance companies that give shareholders voting rights and the opportunity to generate returns and receive dividends. They have consistently outperformed benchmarks due to rising demand. Such companies play a critical role in cancer patient care and financial risk management. Can Serve Free LLC advises Clients to add these types of stocks to build a diversified investment portfolio.

RISKS?

There are risks in investing in insurance company stocks.

  1. Unable to pay out claims: Due to taking on too much risk or if its investments underperform.
  2. Subject to regulatory changes: Political risks.
  3. Unanticipated catastrophic events: major unforeseen events that could put a significant dent in cashflow and near-term profitability.

HOW TO CHOOSE?

The top two criteria an investor should consider when investing in insurance stocks include:

  1. Solid operating income, gross profit, net profit, and per stock sales growth. If an insurance company's earnings meet these standards, you should consider buying.
  2. Long history of underwriting excellence and wide geographic reach.

HOW TO DIVERSIFY?

Adding health insurance stocks to an investment portfolio is a good strategy for diversification that helps spread investments across different asset classes, sectors, and geographies.

Keep in mind that diversification does not guarantee a profit or always protect against loss in declining markets, but it does help to reduce overall portfolio risk.