Live life to the fullest. Grab life by the horns. Just make sure your life is insured. Life insurance is the only vehicle that delivers a set amount of money at a specific point in the future.
While you won’t be around to collect the benefits of your life insurance, your dependents would definitely benefit from it. The money can help pay off mortgage, put your children through college, cover estate taxes, or just help your family make ends meet. If you’re pondering whether to buy an insurance product or not, it would be most beneficial if you consider the following:
1. You have dependent children
2. You support your parents
3. Your spouse depends on your income
On the other hand, if you’re single with no dependents and limited assets, you probably don’t need life insurance.
There are two basic types of insurance – Term Life Insurance and Whole Life Insurance. Each has its pros and cons.
Term Life Insurance lets you specify the amount of coverage you want for a given time – in 5, 10, 15, 20, 25 and 30-year periods. Finance experts say to buy guaranteed renewable full-term insurance. Your premiums won’t change, and your beneficiary receives the full value anytime during the term of the policy.
Term Life Insurance is the cheapest and most popular life insurance you can buy. I was even offered twice by Metrobank and HSBC through an automatic debit on my credit card. I got the cheapest offer. It was HSBC whose premium was only P310 per month.
While term life insurance may be the cheapest form of life insurance, its drawback is that it’s temporary. Once the policy expires, the money you spent on premiums is gone.
Whole Life insurance, on the other hand, has higher premiums because you’re buying an investment that offers lifelong coverage. As long as you pay your premiums, a percentage is set aside and invested. As your policy grows tax-deferred, you can make withdrawals or borrow against it. If you cancel the insurance policy, you can receive some or all of the cash value back.
There are many variations nowadays of these two main types of life insurance. There’s variable life insurance and universal life insurance. They act as a forced savings and help protect you assets. FREE Health Insurance Price Comparisons for Individuals and Families
If your insurance needs change, you may be able to convert your term policy to whole life policy, as long as you do it through your current insurance company. But be careful whose advice you take.
Experts say that insurance agents that sell insurance policies make a whole lot more money on whole life insurance than they do on the term life insurance, so the advice they give may be suspect.
My personal financial advice is that if you’re single with no dependents and you can manage your finances properly, insurance products may not be the best investment option to grow your money. But if you’re the type of person, even if you’re single, who doesn’t know how to manage his or her finances, then insurance products are good way of forced savings. The younger and the healthier you are, the cheaper your insurance premiums will be.
However, no matter if you’re single or married, as long as you have dependents, whether your parents, children, or spouse, then try to get a life insurance. It is definitely a good protection against life’s uncertainties.