Life insurance is a contract between insurance policy holder and an insurer, where the insurer promises to pay a designated amount of money in exchange for a insurance premium, upon the death of the insured person.
Why do I need Life Insurance?
Why we work day in and day out? Where do we expense our salary? The answer is simple; we need money for foods, for accommodation, and fulfil our daily activities. Money is needed to sustain our daily life. Who will financially protect our family, our loved one if something happen to us? Tomorrow and unexpected, who know which one will come first?
Life insurance is the only solution for uncertainty we are facing by providing peace of mind in term of financial protection to our family and our loved one. Here are few reasons why life insurance is important to us, why we should buy life insurance in our financial planning portfolio.
1. Financial protect your family and loved one
If your family and loved one depend on you to support their livelihood, then life insurance as a income protection is a must. Your wife is not working, don’t generate any income and your children is still studying, so whenever any fatal happen to you, they will lose all the financial support.
Life insurance is the only source to replace your income to sustain their daily life and cost of living.
2. Mortgage protection
Think about it – do you want your family and loved one to be homeless if you die unexpected? Where your families have money to pay mortgage loans if you as the only source of income left?
Life insurance can be used to pay off the outstanding home mortgage balance.
3. Education protection
Does education important to our children especially in current society which emphasis on certificate, skill and knowledge? Certificate is the only way as a stepping stone for you to access to corporate door in the job market.
What will happen to your children if something happen to you and you don’t have any money left for them for their school fees? Should we have backup plan to protect our children for their future, invest in their education protection?
4. Final expenses
Funeral expenses and medical bills is a hefty burden. At the junction of difficult and emotional time, your life insurance can cover these expenses without financial hardship.
5. Leave an Inheritance
If you don’t have any assets to pass to your children, you can create an inheritance through buy life insurance policies and naming them as beneficiaries. This provides your children a good financial future and provide for any monetary needs that will arise. Just take an example: You buy an insured value of 100k life insurance with monthly insurance premium of 100 dollar. 20 years of total premiums is 24k. Let say accidentally something happen within 10 years, try to imagine the amount of 100k you get from it. How much and how long period you need to save for 100k? How much you have paid for the exchange of this 100k? Yet the best part is that you get back the entire 24k insurance premium you have paid for with interest if nothing happen to you.
6. Supplement for your retirement
Life insurance contains cash value that will be return to policy holder once its term is ended. You not just take back the cash value of total insurance premium you have paid for the 20 years term life insurance, yet you earn the interest for the insurance premium that you have paid for. Ultimately, it let you save your money at the same time you earn the free benefit of financial protection.
Life insurance is the best way to save money while getting financial risk management in financial planning for your family and loved one. Buy life insurance is first priority in financial planning for anyone who wishes to have peace of mind at the same time saving money and obtain financial risk management.
Just see people around us, who doesn't need life insurance? If they already have bought it, are they getting the right life insurance policies based on their current needs? What life insurance rates suitable for them? 10 years ago life insurance policies you bought when you are single and without property is not suitable again to the current needs after you have married, have children and have property. The life insurance policies need to be reviewed and upgrade to the latest financial needs.
Eventually, buy life insurance is equal to you take your money out from left pocket and put into your right pocket. The best part is you get free financial planning and financial risk management that is most needed in your financial planning to protect your family and loved one. Do you agree?
Here is an example of life insurance:
Alan has a family of 5 persons, himself, his mother, his wife and 2 children. Alan work for a company with salary 6000 per month. He needs to pay car loan and home mortgage. He is the only person to financially support his family. What will happen if he doesn’t buy life insurance and fatal accident happen to him?
Scenario 1 without Life Insurance:
His family lost the only source of income. Tough burden is awaiting them; funeral expense, medical bills, car loan, home mortgage, medical expenses for his mother, school fees and tuition fees for his children.
–>His family may loss the house resulting from unable to pay the home mortgage. They will loss the only shelter.
–>They may need to borrow money from relatives or get help from social welfare organization through fundraising for immediate expense like costs of funeral expense and medical bills.
–>His wife will need to seek for job to financial support his mother and their children, end up that nobody to take care of his mother and children.
–>His children may force to enter job market earlier as unable to pay school fees.
–>Any medical bill arising in the future will create another big financial impact and burden to them.
Scenario 2 with life insurance:
A large amount of cash will be given to beneficiary. With the tailored life insurance policies Allan had purchase, the amount will able to pay off the mortgage loans in one go, an amount of money to support his two children school fees until they are graduate, and cost of living daily expenses needed in future including immediate and emergency expenses.
–>His housing mortgage loans balance is fully paid off. They can continue stay there and own the house.
–>His wife can continue to stay at the house, take care of his mother and their two children.
–>His mother medical expenses that may arise in future are taken care of.
–>His children can concentrate on their study, complete their college.
All the living cost and financial expenses are taken care of by life insurance that Alan has bought, thanks to his sound financial planning and mindset of financial risk management for any unexpected.
Best life insurance is the life insurance tailored to individual need. It plays the most important part for the success of life insurance role in financial planning and financial risk management. Tomorrow and unexpected, which one will come first? Who know?
For Malaysia Johor area and Singaporean only, feel free to WeChat : alexmah_hua for more details and quote life insurance quotes.
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