One of the most expensive and inevitable things to pay in anyone’s lifetime is hospital bills and medicines. Sickness, or if diagnosed with a critical illness, will not just hurt us physically but also financially. But what if you could prepare for it?
Life insurance is the key. It is a system designed to protect us against any financial crisis. When you are covered, you or your family will get an amount of money when something happens like sudden death, being hospitalized, having a grave illness, or had an accident.
On the brighter side, it could help you fund your child’s education, buy your dream home or car, fund your retirement years, and fulfill your life milestones- wedding, travel, and business.
To get to know more about its uses, look at the five benefits of life insurance in general.
1. Enjoy financial freedom and peace of mind.
Because you prepared or bought life insurance while you were young, you could harvest the number 1 purpose of it. Financial freedom is being able to enjoy your hard-earned money to the things you like to buy or spend it with.
You will not be trapped with countless bills because of unforeseen bad events. You will not be forced to sell your precious assets—smartphone, laptop, jewelry, house, or car to finance your treatment or other life uncertainty. This will make you calm when you sleep.
2. Having money intended for financial loss.
When you’re a breadwinner single mother, who will finance your child’s living if you died? It’s still you! Will your income die together with you? Fortunately, here enters your life insurance. The insurance company will give a check to your family.
Because the amount will range tens of thousands to a hundred thousand, your family will still be able to pay for their daily expenses for the next ten years. You are assured that your child will still graduate, even if you are not around.
3. Reliable emergency fund.
There’s money you can use in case you met an accident; a part of your body was lost or when you become disabled. During this time, you cannot work. Because you’ll get a big sum when you met these emergencies, you can use the cash as a substitute for your income.
Also, having a dreaded disease or any illness requires money for medication. You will receive another big check to protect you against the expenses you’ll incur financially.
4. A higher amount of savings or investment.
Some insurance products offer insurance with savings and/or investment. Plan first where you’ll allocate it for future use. It could serve as your kid’s tuition fee, additional pension, or fund your life’s dreams like buying a new house, having a business, or a dream vacation. You need to be patient in getting the rewards of the savings or also known as endowment and investment, through the stock market because this is a long-term venture. Besides, consider this as passive income–money is growing and working for you.
5. Additional income when the inflation rate rises.
Even if you’re still paying for your insurance, you could borrow or withdraw a portion of your savings or investment, in case your current income will not sustain your family’s living because of inflation.
As your child grows older, teach him the importance and benefits of having life insurance. Learning about it earlier will save him.
You could pay a life insurance 1, 5, 10, 15 to 20 years. There will come a period when you’ll have a hard time paying it. Remember the benefits of life insurance and your purpose why you’d bought it in the first place— for yourself and your family.