Financial Literacy 101

Importance of insurance to your family

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In the world that we live in today, our lives are full of uncertainties and exposes to different types of risk that includes loss of life, health, properties and more.

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Of all the risk mentioned, loss of life is the most crucial especially if the one who passes away is the breadwinner of the family.

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Here are the reasons why getting an insurance:

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It provides protection to individuals

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Insurance provides financial support to the loved ones left behind as it replaces the income being provided by the person who passed away. It also helps them to cover the expenses of funeral, debts, hospital bills, interment, etc. The insurance therefore will benefit the people that you will leave behind.

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It generates a long term income for your family

 

Assuming your family receives 2 Million pesos of insurance proceeds and your wife is wise enough to reinvest that money and let's say it generates an annual interest on average of 10%. That means that the family earns 200,000 yearly that they can withdraw for their expenses and just live the principal behind for perpetual income. That money then now working for your family.

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You can utilize it in case of emergency

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Most people think that they have to die first before they benefit with their insurance. Policy holder can actually use cash value, dividend or even borrow money as a loan in times of emergency during the paying period. You can also use it for your retirement once your policy matures at a certain age.

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Insurance provides peace of mind

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No one knows what will happen tomorrow when you step out of your house or even when your inside your home. Accident and illness can happen anytime. No one can predict it. But if you know that you are protected and you do not worry what will happen to your family if the Lord takes you home anytime, that gives you the peace of mind, right?

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In the United states, more than 90% of Americans have life insurance. For them insurance is a necessity. In the Philippines, it is unfortunate that majority of Filipinos  does not have insurance coverage. But I have no doubt in my mind that the figure will rise as more Filipinos now are getting educated financially. Thanks to the help of social media to spread financial literacy across the country.

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Let us keep in mind that insurance is not an expense but an investment. We all need it so that we, and our families will have a better life ahead.

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I hope this helps!

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