What’s the importance of having an insurance policy?

What is an insurance policy?

An insurance policy is a way to make sure that you and your family are ready to face any financial emergencies that may arise. Insurance is about taking note of what type of financial needs you and your family have, and trying to get ahead of those needs. 

Insurance is supposed to help you and your family avoid getting into any financial trouble by preparing early for any foreseeable challenges that might happen in the future.

What is the importance of having an insurance policy?

Having an insurance policy means that you and your family will not have to worry about financial trouble again. Here are how you can reach financial freedom by having a life insurance policy. 

Savings. Because it has gotten easier and easier to spend money, accumulating savings has become more and more difficult. The innovation of online payments and shopping has made it easier and more convenient to spend your money.

Getting a life insurance policy makes it easier and more convenient for you to save your money. A portion of your affordable premium payments can go to a cash benefit that can be used as savings that you can borrow against, just like real savings account at a bank. 

Retirement. You may also opt to use your insurance policy to save for your retirement. It may seem like retirement is a lifetime away, especially since you are so young and just starting.

However, it is a wise decision to start setting funds aside for when you retire. Your life insurance can also include a cash benefit that can be used as a retirement benefit when the time comes.

Education. If you have any children, you can also allocate part of your life insurance policy to have a cash benefit for the future education of your children. After all, life insurance is usually meant to benefit people other than the policyholder. 

Investment. It is important to have another source of income aside from the salary they receive from their jobs. Many people think that an investment has to involve a large sum of money, but this is not the case with life insurance. You and your financial agent or broker will work together to figure out how much money you are financially capable of paying for premiums.

You may have the option of adding an investment side to your life insurance plan. This means that part of your premium payments will be invested in the stock market by stockbrokers that are affiliated to the life insurance company. After five to ten years, you can expect your initial investment to grow over tenfold, depending on how healthy the stock market is. Unlike other types of investments, The investment side of life insurance has minimal risk and is sure to offer very large returns on your investment.

Medical expenses. You may never know when you would need the money for a medical emergency. In the Philippines, many families go broke because they are unprepared for medical emergencies. If a family member gets sick, the need for antibiotics alone, even without any hospitalization bills can set a family back thousands of pesos, many families do not have an emergency fund meant for these kinds of situations. our life insurance policy can provide another cash benefit that you can borrow against, in case any medical emergencies come up.

Peace of mind. The most important thing that a life insurance policy can provide you and your family is the peace of mind. It would give you the power to be in control of any situation and help you handle it without going into financial ruin.