Life is unpredictable, we don’t know what will happen this day, tomorrow or for the remaining years. Accidents and death will come in our way, and we don’t know exactly when. That’s why insurance is a big help for us Filipinos, especially for the breadwinners. At first, I really don’t know the importance of it, (Well, I was young at that time! Don’t blame me! Hahaha). I ignored the commercials of insurance companies because my younger self thinks that I don’t need it. I’m still young and healthy (Duh).
But, why a sudden change in your mind, Nicay? Hmm. Why suddenly you get life insurance?
It’s been two years since I got my first plan in Sun Life Philippines, and so far I learned so much of how important of having insurance and savings for our future goals.
Do you want to know why I get life insurance? Then here are the reasons:
Protection – The main purpose of having insurance is for protection, in case of sudden accident or death, the family or beneficiaries will get money so they can continue with their lives, especially if the plan holder is a breadwinner.
Emergencies – The policy I have is VUL or Variable Universal Linked insurance. In cases of emergency, you can withdraw partial money in your fund value. But, I still recommend that we need to have a separate fund for emergencies, and this is what we call an emergency fund. An emergency fund should be at least 3-6 months of our monthly expenses, or it can be 3-6 months of our monthly income. So, as a Financial advisor, I advise you that you need to start saving first for your emergency fund. It is okay to save it partially until you completed the target value, then you can continue in investing a part of your money. (Okay I will have a separate blog post for tips and tricks in savings, okay?)
Wealth Transfer – Life insurance can be an alternative for wealth transfers. If example I will have kids, I will transfer my fund value on my plan to them, plus estate taxes are not deducted in insurance.
Disability Benefit – Aside from death, life insurance includes waiver of premiums. If I will not be able to provide or have an income in paying my premiums in case I become disable, the insurance company will provide for the continuation of my plan in the remaining years.
Financial Goals – Life insurance can be also a savings type of plan. Because my plan is VUL (Variable Universal Life) insurance, a part of my premium payment goes to the insurance and also to investments. The investment part of my plan will depend on the risk appetite of the plan holder. In my part, because it is for long term/retirement goal, I choose the equity/stocks type of investment. I also don’t worry because there is a fund manager that handles my investment portfolio.
So, are you still having any doubts about having insurance? There are so many benefits of having insurance in our lives. Majority of us thinks that having an insurance is preparing for your death, NO it is not like that! Think of this, if you have your insurance, you will not become worried about everything, because you know you have your future planned ahead not only for you but to your family also.
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