Insurance 101

If you have a spouse, children, parent or family member who depend on you, or even if you are single, without any dependent, and are living your life to the fullest, you still need life insurance to make sure that there are no unpaid expenses which will burden your family in case something unexpected happens to you. More than that, you also want to "auto-save" your hard earned money. Investing in life insurance is one of the most important financial decisions that you can make.

Ask yourself these questions:

• If something happens to me, can my family continue to live normally and afford all the daily expenses I've left behind?
• If something happens to me, can my family settle all my debts (housing loan, car loan etc.)?
• If something happens to me, can my kids still go to college?
• If something happens to me, can my family survive financial hurdles?

You get life insurance to ensure that your loved ones can continue living even if you're no longer around.

To get a life insurance is to protect, care and safeguard your future. There are several risks in life that hinder the income flow to your family, and life insurance is one of the best instruments to alleviate these risks.

• Dying too soon – Insurance provides money that can take care of expenses associated with the early demise of a breadwinner.
• Living too long – Insurance ensures that in old age, people will not be dependent on their families for their daily needs.
• Being disabled – Insurance will ease the financial pains and difficulties of being disabled.

Life insurance may not be able to prevent these threats/contingencies from happening but it can help in cushioning the financial impact any of them could bring.

Life insurance has a simple purpose; to help prepare and protect your family financially if you are no longer around. A life insurance payout or death benefit can be used in any way your family sees fit. It can be used as:

• Clean-up Fund – a fund to pay all debts upon death. This can include outstanding hospital/medical bills, burial expenses etc.
• Family Dependency Period Income – a fund to provide income for your family and cover their living costs.
• Emergency Fund – a fund to be used in the event of illness, accident or unforeseen situation that may arise in your family.
• Education Fund – a fund to provide education for your children.

The younger and healthier you are, the easier it may be to secure the life insurance policy that you want. If you have a partner, spouse or family who may struggle to cope financially, then acquiring one today can give you the feeling of security.

If you have a family to support, the insurance provided by your employer or the company you work for may not be enough. What happens to that coverage if you change jobs? If you leave the company, you may have to forfeit the coverage you have. Having a personal policy can ensure your family has adequate protection from the unexpected.

It is important to determine the value of your life insurance in terms of what it will take for your family members to be financially independent in your absence. To estimate that amount, add up all expenses and calculate future liabilities that your family will have to pay in your absence. Your family's needs and goals must reflect in your insurance plan.

Check out Insular Life's financial calculators to help you determine your insurance needs and financial goals!

It is common to encounter financial difficulties which could lead to non-payment of your policy. To keep your policy in active status, you need to pay premiums regularly on or before your policy's due date. However, the policy allows a 31-day grace period. Your policy will cease to be in force if premiums are not paid within the grace period, unless your policy has already earned enough cash values or dividends. If your policy has already earned cash values or dividends, the premium default option you elected in your insurance application form or you have applied for through an amendment, will apply.