Life Is Good And Can Be Better

Money has always been an integral part of our lives in supporting the activities we engage in and the goals we base our achievements on. Suffice to say, every facet of our lives is directly or indirectly associated with what money we have, where decisions are to be made primarily for the result of money in hand, maybe in abundance or because of a lack of it. But the question is really about how we can sensibly manage money or financial planning in these modern times.

In a less-than-perfect world, the logical answer would be to manage our money more proficiently, in order to harness greater benefits and advantages than those we are enjoying at the time. Or would more prudent financial planning be required in order to be able to squeeze and stretch the dollars further in our life-long endeavour of ensuring financial stability and safety from every dollar we can acquire?

Planned or not, we crave better lives in the future, and it is this factor that speaks volumes about how prosperous and financially adequate we must be in order to obtain what our hearts desire.

The most common beginning to financial security is the ability to save for a rainy day. However, this would also be called into question as it does require discipline. Life insurance can be a solution for us to build that discipline and habit of saving for the welfare of our beloved family, or for that matter, a real rainy day, if you will.

The benefits of life insurance

There are several advantages that we can get from the habit of saving money through a life-insurance policy.

First, life insurance provides a replacement income for a family if at any time the head of the family dies. In this case, as a form of protection against the premature death of the head of the family, life insurance provides income-replacement guarantees to the assured or the heirs of the deceased.

Second, life insurance provides financial security for specific and special needs in the future such as educational funds and old age.

Third, life insurance provides a reserve for our families in emergencies. When unexpected events arise such as hospitalization or medical care, life insurance can provide the necessary financial aid that we need. Life-insurance policies can also accommodate financial support for health care as a result of serious illness or accidents.

Fourth, life insurance can help us in preparing for financial independence in old age. In this case, the discipline required to maintain a life-insurance policy brings the benefits of the availability of funds in the form of retirement savings to meet our diverse needs.

Simply put, I will give you an illustration of the benefits of the policy and the sum for that assured that is contained in a life-insurance policy.

For example, an insured person with a net worth of 5 million dies. However, the assured had only paid one month’s premium on their policy. Still, the beneficiaries are entitled to the sum of 5million from the life insurance company.

Therefore, the amount of money received by the beneficiaries of the victim has increased exponentially when compared to the amount of premium paid by the assured, or the equivalent of one month’s premium. Upon the death of the assured, the cash benefits received by his beneficiaries are able to sustain those left behind comfortably, wherein lies the true benefit of having a life-insurance policy.

Philosophically, when we protect ourselves with a life-insurance policy, we get into the habit of saving, which is an act that is ‘mandatory’! It is because of our discipline in paying life-insurance premiums on a regular basis.

When we discipline ourselves in paying the premiums, we are also instilling a ‘forced savings’ habit, which we hope could encourage an effective savings culture. It may begin subconsciously, but real consciousness arises in the realization that all benefits could be forfeited when one fails to pay premiums as required.

As policyholders, we also understand that insurance premiums will increase with age. If we terminate the policy that we already have, we are putting ourselves at a disadvantage, or could even incur losses. This is because a higher premium will have to be paid for a new policy later, as opposed to the one we have allowed to lapse or have cancelled. In addition, new medical check-ups might be required.

For these reasons — for cost efficiency and the certainty of protection that we require — it is important that we continue to pay premiums on a regular basis for the welfare and benefit of our families’ future. For maximum benefit and so we can get the insurance coverage later, the discipline of paying premiums is an obligation and a responsibility that we all must embrace!