Written by Calvin Lau Chuen Yien | October 11, 2021
Many people here try to ensure their important assets such as houses, cars, and businesses. But in a real sense, nothing is more important than you. The greatest asset that needs to be insured more than anything is you says Calvin Lau Chuen Yien. As you go through life in finding a job, partner, raising a family, or even starting a business.
You want to ensure your family’s financial security and take care of your loved ones in times of need even after your death. That’s where Life insurance comes in. So whether you are a single person, have a partner, are married with kids, or have relatives that financially depend on you. You may want to consider having life insurance because it helps your loved ones have access to money in times of need when you die.
In most cases, we often fail to think of what will happen to our family and loved ones in an untimely death situation. Though planning for things like this can be uncomfortable, it can help save your family from stress and any financial difficulty. Presently your family can be financially stable or buoyant but what happens when you die and your income ceases to flow in? Can they still cope with daily living expenses, pay off debt and mortgage?
Life insurance is undertaken between an insurer and insurance policyholder. With a promise to pay an amount to a designated beneficiary after the death of the insured person. Other circumstances like critical or terminal illness can also lead to the payment depending on the undertaking.
There are typically about three types of life insurance from which one can choose.
The coverage of this insurance is for a set period of time which can be 10, 15, 20, or 30 years. Your coverage expires once the set period ends but some insurance policies allow you to renew or convert your policy.
This insurance has a cash value component and doesn’t expire as long as the premium payment continues. It also gives you the flexibility of changing the premium and death benefits.
This insurance does not expire, you just need to ensure continued payment of premiums. The cash value component of this insurance has the potential of growing.
Life insurance can protect your family financially because your savings might not be enough to sustain them in case of unforeseen circumstances or after you are gone. And your family can be protected from any financial difficulty in an unexpected situation.
When you die debt doesn’t just disappear, meaning your family will have to sort for means of paying your debt. It could lead to selling some of your assets to raise money for the debt which might not even be enough to pay off all the debt. But with life insurance, it will be easy for your family to pay off any debt including mortgage, personal or educational loans, business debt, and credit card debt.
If you are self-employed, working for someone, or own a small business there are certain expenses in the family that your income covers. Let’s say your income is budget for food, utilities, health care, housing, and car maintenance. Once you are dead the family will still need to take care of those expenses but your income is no more coming in. Life insurance death benefits can help provide the money your family needs to take care of those expenses covered by your income.
For someone already with children, life insurance can help your family pay for any childcare or education expenses that may arise later in the future. Your death will affect your spouse’s finances, making it difficult to effectively care for the children after your death. Especially if there are no savings set aside for children’s college education. The sum of money that will be paid as a death benefit from the insurance policy will serve as additional money to cover the education of your children in case of death.
Financial expenses will only add to the emotional stress your family is going through already due to your death. But with life insurance, your family can make use of some of the money from the death benefit to cover funeral expenses. In case of sudden death, you don’t want your family to be worried about funeral expenses then get life insurance.
With the importance of life insurance listed above, you should also be able to see the reasons why you may need to get one to help your family financially in case of unexpected death or illness, says Calvin Lau Chuen Yien.
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