why you need a life insurance

8 Reasons Why You Need An Insurance Policy Right Now

Many Filipinos do not understand the concept of insurance policies. Why would you want to pay for something that you probably won’t ever be able to use?

Although traditional life insurance policies were created to help provide income to the family left behind after the policyholder’s death, newer policies have become more flexible to the people’s needs. In fact, they can already be used for other purposes such as for starting a business, paying off big-ticket purchases or funding one’s retirement.

As a millennial, you have probably already become wiser in money matters and have started to set your finances right and build money-saving habits. But, if you are still not convinced about insurance, the reasons below should compel you to already buy one:

1Your family lives off on your income

If your family fully depends on your income or a majority of your household’s income comes from what you make, you need to make sure that you have a plan B to replace that for when you (gasp) die or could no longer work. Generally, you need have a policy that can cover at least a few years of household expenses which should be enough time to get your family back on their feet.

2You do not want them to worry about debts

You have probably started buying a house, a car and perhaps acquired debts along the way. While you save yourself the headache from paying off those things when you die, your family isn’t. When you could no longer bring in the household income, your insurance will help pay off whatever remaining debt that you have. Surely, you wouldn’t want your six-figure loans and outstanding credit card balances to be your legacy, right?

3You want to cover any final expenses

Let’s all be practical, death is no cheap matter. Whether you choose to be buried six feet under or cremated and placed in an urn, it will take a toll on your family’s not-so-deep pockets. Plus, you also have to worry about the daily expenses during your wake. In most cases, people don’t really die sudden deaths because some of them may have had to spend a short time in the hospital. These things add up and if you do not have an insurance policy to back your family up, they will be grieving both about you and the money.

4You want to achieve long-term goals

Insurance policies are not just helpful for when you die. Many policies today have been designed so that you can benefit from it even when you are still alive. For some people, the policy can be used to put up a business, buy a home or start their retirement. Some products are investment-linked and give not only dividends based on their performance but also bonuses if you do not withdraw the funds for a certain period.

5You want an additional income stream during retirement

For some life insurance policies, holders have the option to either withdraw the funds in a lump sum or take them little by little every month, allowing the rest to still continue to grow. This should help provide an additional stream of money, in addition to the pension you get from the government, for when you no longer work.

6You want to pay off estate taxes

Estate taxes are extremely expensive and surely, you would not want to burden your family into paying those taxes just to get the properties that are rightfully theirs. Many people buy life insurance to help pay taxes for the large estates that they leave behind to their families.

7You want to force yourself to save

As a millennial, you probably have not even thought about retiring but have seriously considered wanting to save money for the future. Some insurance policies are designed as a ‘savings account’ so you are forced to save on a regular basis. You can then choose to withdraw everything or a portion of it in a few years or you could just let it stay there and grow further.

8Insurance is cheaper when you are younger

Insurance isn’t for everyone. If you still depend on your parents’ money or have not built an emergency fund just yet, then this shouldn’t be your top priority. However, if you do have dependents and have loans, then you should already seriously consider having one. Policies tend to be much cheaper when you are younger and healthier. Plus, you might no longer be qualified to get one if you get it when you have already incurred illnesses.

Filipinos are generally not insurance believers because they think it is just an additional expense. But, just think about it: where would you or your family get your income stream if something happens to you? Wouldn’t it be better if everyone grieves for you and not think about money anymore?

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Pam is an outdoors-loving millennial mom who loves to travel with her partner and their daughter. You can catch travel, family and money adventures on their family travel blog, Hey...
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