Why Life Insurance is Essential to Your Family’s Financial Security

life insurance philippines
We work hard for a variety of reasons. But if you have a family to support, you would want to provide food, shelter, clothing, education and other necessities to them. We want to do what we can to give them a good life. That’s why as much as possible we try to provide for all their needs. However, providing for their needs may not be enough. We should also consider building the foundation by having some form of financial security.

Life insurance is the best way to protect against the uncertainties of the future. When the unthinkable happens, life insurance policies will guarantee financial support to your family. As you may know, a life insurance policy is a financial contract between a person and the insurance company. The insurance company is obliged to pay back a lump sum after the death of the person who purchased the insurance policy.

What are the benefits that you will get from life insurance?

It Will Give You Peace of Mind

Life is uncertain. We don’t know what will happen tomorrow or the next day. We don’t want to leave our loved-ones without security. Purchasing an insurance policy will give you assurances that your family will have assets to be able continue with their lives in case you, as a provider, is not there anymore. The insurance policy can be used to pay the mortgage, tuitions fees or it could be given as inheritance to family members.

In other words, you will worry less about your family’s financial well-being even with the reality of life’s uncertainties.

Savings and Investments

Nowadays, insurance policies may be coupled with savings account that earns interests overtime. This is particularly true for products offered by banks. It may allow you to take out your earnings from your account after retirement or once you are done paying for it. It may be an insurance policy and savings account rolled into one.

In some instances, burial expenses can also be a problem. A life insurance policy may also be used to pay for burial expenses.

How to Buy a Life Insurance Policy

There are a many types of life insurance policies. I have discussed some of them here. You may go through them to help you understand the basic types. But talking to an agent about particular products will help.

It will also be to your benefit to compare life insurance products from different companies. An agent will only know the details of his company’s products. He would often tell you why his product is better than the competition but you can’t take his word for it. You need to investigate for yourself.

You can talk to people you know and trust to give you ideas about their own choice of life insurance policies.

What I Would Buy

Having worked as a former life insurance agent, I have come to know a few details about life insurance policies. I have bought policies for myself thinking then how they fit my needs. But as I learn more, I realized I could have made better choices.

If I were to buy a life insurance policy today, I would buy term insurance. It’s the least marketed product but it’s the cheapest. It is purely for insurance purposes and nothing more. Accumulating your money in a life insurance policy for the purpose of investments may not be a great idea if you look at how poorly they earn.

I would not stop anyone from considering other types of life insurance products, however. Some of them may actually provide what you need so study them and make your choice.