Many will agree that life insurance is the possibly the best device ever invented for the purpose of family protection. For a young couple, the breadwinner will not be able to save fast enough the amount he required to guarantee his family the lifestyle he desires for them should any misfortune befell him prematurely. The cost of daily living is unavoidable. There is a cost to every hour that an individual spends on earth. Hence, the most important of the many benefits of life insurance is the concept of life insurance as a device for family protection. The breadwinner is therefore able to ensure continuous provision for the daily expenses of his family in the event that he dies prematurely.
Besides the above, the other important benefits may be listed and summarized as follows:-
1. Retirement Income Fund – endowment and investment linked insurance policies are rather popular due to the savings element in these types of policies. The expenses of living in retirement can never be escaped. If insufficient funds are not provided for, the individual will face the prospect of laboring into their old age and n the worse scenario, may need to experience the anguish of seeking charity in the form of public assistance, or dependence upon one’s own children. Many a time, heartrending stories of abandoned old folks are found in the media. Hence, saving for the future through a life policy to save for retirement when the maturing policy is redeemed is another popular concept of life insurance. The benefit is that the fund originally intended for family protection will be your retirement income fund.
2. Educational Fund - The cost of an education is ever increasing and the expenses to provide for the children tertiary education are unavoidable. One may obtain a loan when the time comes for the child to attend college and pay back in installments when the child finished college. A far better concept would be to look ahead and pay in advanced the installments into a fund. The benefit is that a fund is already created to cater for the child’s education, whatever happens tomorrow.
3. The Last Expense Fund & a Fund for Estate Duties - doctor’s bills, hospital bills, funeral expenses, lawyer’s fees for the administration of the deceased’s will and estate, etc. are inevitable expenses and obligations faced by the deceased’s surviving family members. It may be argued that one just need to set aside an amount be it two thousand dollars or twenty thousand to meet these expenses. But isn’t it simpler and sounder to set aside just 2 % to 3% of this amount each year to an insurance policy for the next 40 to 50 years for the costs to be paid in full? After all, like they say, death is a sure certainty, may it be tomorrow or 50 years from now.
To sum it all up, the terms of life are hard and the business of life imposes certain costs of which there is no escape. The benefits of life insurance therefore include the provision of protection to one’s family especially at the early stage of family life, the obligation for the costly tertiary education for one’s children, forced savings for one’s own retirement and avoid burdening one’s family of the inevitable last expenses one required when they leave this world. Hence, indeed, the benefits of life insurance and the understanding of its concepts are too wide reaching to be ignored.
Understand Why Insurance & Risk Management Are Important Elements In Financial Planning
Comprehensive Health Care Plan & Protection - A Medical Insurance Guide for You
Over the years with the advancement in medical technology and the increasing use of sophisticated diagnostic equipments, the cost of proper medical care and treatment had become increasing exorbitant and beyond the reach of many people. Indeed, without a health or medical insurance policy, if one should fall ill to any serious or terminal disease, the cost of seeking proper treatment can seriously set back one’s finances and derailed one’s financial plan. The benefits and importance of a health plan cannot be emphasized enough. Hence, it is surely vital that a comprehensive health care plan and protection is an essential item in one’s financial plan.
If you are looking around for the right insurance plan and baffled by the different kinds of insurance plan available in the market, a health insurance guide summarized and listed below will help you to ensure that you have a comprehensive health care coverage:-
1. Your health plan should include a hospitalization and surgical insurance plan which covers room and board, laboratory fees, the use of special facilities, nursing care, prescription drugs and the medical supplies necessary for your treatment.
2. It is important that the costs of pre and post hospitalization treatment are covered in your plan.
3. Your plan should also include a critical illness plan whereby you will be able to receive a lump sum cash payment from the insurance company if you are diagnosed with any critical illness listed under the policy.
4. Another important inclusion is a hospital income plan that will provide you with income replacement should you be hospitalized due to any accident or illness.
5. The inclusion of a disability income plan that will cover your day to day expenses should you be unable to work due to an accident or illness.
Many people make the mistake of delaying the purchase of a health plan until they are at an older age or when they are ill. Due the changing working environment that we live in today, it is important to highlight that work stress and unhealthy eating habits has resulted in more young adults succumbing to heart attack and other illnesses normally associated with the elderly. Furthermore, accidents on the roads and even in the playing field happen daily. Therefore, with the exorbitant cost of medical treatment and medical care in hospitals these days, a comprehensive health care and medical insurance is an important financial security blanket and it is imperative that you should include it in your financial planning portfolio.
If you are looking around for the right insurance plan and baffled by the different kinds of insurance plan available in the market, a health insurance guide summarized and listed below will help you to ensure that you have a comprehensive health care coverage:-
1. Your health plan should include a hospitalization and surgical insurance plan which covers room and board, laboratory fees, the use of special facilities, nursing care, prescription drugs and the medical supplies necessary for your treatment.
2. It is important that the costs of pre and post hospitalization treatment are covered in your plan.
3. Your plan should also include a critical illness plan whereby you will be able to receive a lump sum cash payment from the insurance company if you are diagnosed with any critical illness listed under the policy.
4. Another important inclusion is a hospital income plan that will provide you with income replacement should you be hospitalized due to any accident or illness.
5. The inclusion of a disability income plan that will cover your day to day expenses should you be unable to work due to an accident or illness.
Many people make the mistake of delaying the purchase of a health plan until they are at an older age or when they are ill. Due the changing working environment that we live in today, it is important to highlight that work stress and unhealthy eating habits has resulted in more young adults succumbing to heart attack and other illnesses normally associated with the elderly. Furthermore, accidents on the roads and even in the playing field happen daily. Therefore, with the exorbitant cost of medical treatment and medical care in hospitals these days, a comprehensive health care and medical insurance is an important financial security blanket and it is imperative that you should include it in your financial planning portfolio.
Why You Need Health Insurance – Understanding the Importance of Health & Medical Insurance
Why is having a health or medical insurance so important? There is certainly a misconception that medical insurance is only for the elderly and older folks. Many young adults and even some middle aged adults have this misconception that since they are still healthy and without any illness, they do not need this security blanket that a health insurance policy provides. Their argument is that the premiums are high and that they are not getting anything in return if they do not make use of the policy.
Perhaps, these people are ignorant or have not heard or read of young and healthy people who without any warning, suffer a health attack or succumb to cancer. This is not surprising considering the hectic lifestyle and the regular intake of unhealthy food in this fast moving world that we live in. In addition, unforeseen accidents, minor or major can happen anytime. Breaking an arm or a leg can happen anytime while playing basketball or football. In the tropics, many people young and old falls victims to dengue due to mosquito bites. Considering the rising cost of medical care, hospitalization, surgery and medicines, a visit to the hospitals for treatment can indeed set back your hard earned savings if you are not covered under a health insurance plan.
A well meaning financial planner will advise that a financial plan which would include managing your investment risks will not be complete without a comprehensive health and medical insurance policy with critical illness coverage and hospitalization and surgical (H&S) coverage. Indeed, a financial investment plan can be derail if one should suffer the tragedy of succumbing to any life threatening illness such as cancer, diabetes, etc causing the person to lose his job and income before the financial goal of his investment plan materialize. The cost of treatment which may be exorbitant from the hospital expenses and surgery needed would cause you to use up the emergency funds and in the worst scenario may require you to withdraw from investment program before it mature if a medical policy was not purchased earlier. One should realize that hospital treatment cost these days include not only surgery and medication but often diagnostic tests involving sophisticated equipments, physiotherapy, etc. hence, the rising exorbitant cost of medical treatment.
One reason why many people do not purchase a health and medical insurance is due to the opinion that their employers have already provided the medical coverage. They may not be aware that once they leave their company, the coverage will cease. Hence, they may be caught in a bind if they are terminated during an economic downturn. Premiums for this kind of policy are lower if you purchase coverage at a younger age and when you are still medically fit. Those who insure themselves when they are older and not medically fit may have to pay higher premiums or are subjected to certain exclusions. Older folks and those who have some form of illness will therefore find themselves in a very precarious position if they are terminated from their job and are without medical insurance.
In summary, having a health and medical insurance is important as an security blanket that you need to buy but hope never to have to use. A health plan will give you the necessary assurance that you have the finances when the need arises.
Perhaps, these people are ignorant or have not heard or read of young and healthy people who without any warning, suffer a health attack or succumb to cancer. This is not surprising considering the hectic lifestyle and the regular intake of unhealthy food in this fast moving world that we live in. In addition, unforeseen accidents, minor or major can happen anytime. Breaking an arm or a leg can happen anytime while playing basketball or football. In the tropics, many people young and old falls victims to dengue due to mosquito bites. Considering the rising cost of medical care, hospitalization, surgery and medicines, a visit to the hospitals for treatment can indeed set back your hard earned savings if you are not covered under a health insurance plan.
A well meaning financial planner will advise that a financial plan which would include managing your investment risks will not be complete without a comprehensive health and medical insurance policy with critical illness coverage and hospitalization and surgical (H&S) coverage. Indeed, a financial investment plan can be derail if one should suffer the tragedy of succumbing to any life threatening illness such as cancer, diabetes, etc causing the person to lose his job and income before the financial goal of his investment plan materialize. The cost of treatment which may be exorbitant from the hospital expenses and surgery needed would cause you to use up the emergency funds and in the worst scenario may require you to withdraw from investment program before it mature if a medical policy was not purchased earlier. One should realize that hospital treatment cost these days include not only surgery and medication but often diagnostic tests involving sophisticated equipments, physiotherapy, etc. hence, the rising exorbitant cost of medical treatment.
One reason why many people do not purchase a health and medical insurance is due to the opinion that their employers have already provided the medical coverage. They may not be aware that once they leave their company, the coverage will cease. Hence, they may be caught in a bind if they are terminated during an economic downturn. Premiums for this kind of policy are lower if you purchase coverage at a younger age and when you are still medically fit. Those who insure themselves when they are older and not medically fit may have to pay higher premiums or are subjected to certain exclusions. Older folks and those who have some form of illness will therefore find themselves in a very precarious position if they are terminated from their job and are without medical insurance.
In summary, having a health and medical insurance is important as an security blanket that you need to buy but hope never to have to use. A health plan will give you the necessary assurance that you have the finances when the need arises.
Life Insurance as a Savings and Retirement Plan
Many arguments have been put forth especially by insurance agents that life insurance is a complete, perfect and balanced financial program by itself. Personally, I do agree with the argument although there are many differing opinions against it. But surely, most cannot deny and acknowledge the fact that life insurance is simply great and supreme as a savings and accumulation vehicle as well a retirement plan.
There are many reasons for this argument and I would like to put forth six logical reason why life insurance is simply as a great savings and retirement plan rolled into one as summarized below:-
1. To maintain the life insurance policy, the policy holder is required to make the periodic payment regularly and consistently to prevent the policy to lapse. Herein, lays the secret of forced savings and systematic accumulation to achieve your financial goals.
2. Records have shown that for life endowment policies of medium to long term say 20 to 25 years, the projected yield is around 4 to 6%. This is certainly superior to the low prevailing interest rates that banks offer these days. Based on the difference in the savings rate of banks, and the compounding effect, insurance is certainly considered as a better than an average savings vehicle.
3. In many countries, the returns from the life insurance policies are generally tax free. Due to this advantage, its returns will certainly be superior to that of bank deposits.
4. Life insurance has always been regarded by investments experts and financial planners as a moderately low risk investment. Hence, it certainly has a vital role to play as an asset allocation alternative in building a balanced investment portfolio in the retirement plan.
5. The use of life insurance as retirement tool can start very early in life, almost immediately after your first pay check. As the nature of a life insurance compels people to save systematically, you can be assured a sizeable retirement account at retirement.
6. In recent years, investment linked life insurance policies have become very popular in the insurance industry. These types of policies allow you to systematically invest into the financial market to achieve even higher yield for your savings when compared with your money deposited in the banks.
Life insurance has been a wonderful creation. The contribution of life insurance to the world had been immense. The logic that the instance you purchase an insurance policy, you have created an immediate estate for your family makes life insurance such an important element in the financial planning process. Needless to add, as supported by the above reasons, life insurance can truly be considered as a great savings and retirement plan.
There are many reasons for this argument and I would like to put forth six logical reason why life insurance is simply as a great savings and retirement plan rolled into one as summarized below:-
1. To maintain the life insurance policy, the policy holder is required to make the periodic payment regularly and consistently to prevent the policy to lapse. Herein, lays the secret of forced savings and systematic accumulation to achieve your financial goals.
2. Records have shown that for life endowment policies of medium to long term say 20 to 25 years, the projected yield is around 4 to 6%. This is certainly superior to the low prevailing interest rates that banks offer these days. Based on the difference in the savings rate of banks, and the compounding effect, insurance is certainly considered as a better than an average savings vehicle.
3. In many countries, the returns from the life insurance policies are generally tax free. Due to this advantage, its returns will certainly be superior to that of bank deposits.
4. Life insurance has always been regarded by investments experts and financial planners as a moderately low risk investment. Hence, it certainly has a vital role to play as an asset allocation alternative in building a balanced investment portfolio in the retirement plan.
5. The use of life insurance as retirement tool can start very early in life, almost immediately after your first pay check. As the nature of a life insurance compels people to save systematically, you can be assured a sizeable retirement account at retirement.
6. In recent years, investment linked life insurance policies have become very popular in the insurance industry. These types of policies allow you to systematically invest into the financial market to achieve even higher yield for your savings when compared with your money deposited in the banks.
Life insurance has been a wonderful creation. The contribution of life insurance to the world had been immense. The logic that the instance you purchase an insurance policy, you have created an immediate estate for your family makes life insurance such an important element in the financial planning process. Needless to add, as supported by the above reasons, life insurance can truly be considered as a great savings and retirement plan.
Insurance in Financial Planning – Importance of Managing Investment Risks
Insurance certainly plays an important role in the financial planning process in the context of the managing of one’s investment risks. In financial planning, a logical step to improve and increase one’s net worth is to indulge in a careful and a well implemented investment plan. You would required time to be on your side and also the patience not to plunder into your investments long enough to allow them to grow through compounding.
However, we do know that unforeseen events do happen. It is therefore sensible and pertinent to take the necessary precaution in managing your investment risks by including some relevant insurance policies into your financial portfolio. Purchasing the right type of insurance is of paramount importance and certainly a necessity in ensuring and achieving success in your financial goals and objectives.
Two very important insurance policies recommended in your financial investment plan portfolio and the reasons for their recommendation are stated below:
1. Term Life Insurance with TPD (Total Permanent Disability) rider.
“Buy term and invest the difference in a diversified portfolio of long term investment instruments” is the call of most well meaning financial planners. The reason for it is that term life insurance is the cheapest form of life insurance in the market and the purest form of life insurance with a protection element only without any savings features built into it. Therefore, a term life insurance policy provides more protection coverage for a smaller annual premium. This will allow you to stretch your insurance dollars the furthest and to invest the difference in savings and investment vehicles that have higher long term historical returns. A term life insurance policy with a TPD rider will provide pure protection in the event of death and also in the event for total disability.
With the right amount of term life insurance in place, you will be able to allow sufficient time for your investment portfolio to mature to achieve your financial goals within the period before the term insurance policy expire.
2. Medical Insurance
A financial plan with the intention of managing your investment risks will not be complete without a medical insurance policy with critical illness coverage and hospitalization and surgical (H&S) coverage. A financial investment plan can be derail if one should suffer the tragedy of succumbing to any life threatening illness such as cancer, diabetes, etc causing the person to lose his job and income before the financial goal of his investment plan materialize. The cost of treatment which may be exorbitant from the hospital expenses and surgery needed would cause you to use up the emergency funds and in the worst scenario may require you to withdraw from investment program before it mature if a medical policy was not purchased earlier.
The quantum of amount of term and medical insurances required will depend on the individual needs and financial dreams of the individual.
There are other types of insurances for a more comprehensive financial program but the above two types of policies above are certainly vital in the managing of your investment risks. It certainly is a folly to ignore the importance of insurance in the financial planning process.
However, we do know that unforeseen events do happen. It is therefore sensible and pertinent to take the necessary precaution in managing your investment risks by including some relevant insurance policies into your financial portfolio. Purchasing the right type of insurance is of paramount importance and certainly a necessity in ensuring and achieving success in your financial goals and objectives.
Two very important insurance policies recommended in your financial investment plan portfolio and the reasons for their recommendation are stated below:
1. Term Life Insurance with TPD (Total Permanent Disability) rider.
“Buy term and invest the difference in a diversified portfolio of long term investment instruments” is the call of most well meaning financial planners. The reason for it is that term life insurance is the cheapest form of life insurance in the market and the purest form of life insurance with a protection element only without any savings features built into it. Therefore, a term life insurance policy provides more protection coverage for a smaller annual premium. This will allow you to stretch your insurance dollars the furthest and to invest the difference in savings and investment vehicles that have higher long term historical returns. A term life insurance policy with a TPD rider will provide pure protection in the event of death and also in the event for total disability.
With the right amount of term life insurance in place, you will be able to allow sufficient time for your investment portfolio to mature to achieve your financial goals within the period before the term insurance policy expire.
2. Medical Insurance
A financial plan with the intention of managing your investment risks will not be complete without a medical insurance policy with critical illness coverage and hospitalization and surgical (H&S) coverage. A financial investment plan can be derail if one should suffer the tragedy of succumbing to any life threatening illness such as cancer, diabetes, etc causing the person to lose his job and income before the financial goal of his investment plan materialize. The cost of treatment which may be exorbitant from the hospital expenses and surgery needed would cause you to use up the emergency funds and in the worst scenario may require you to withdraw from investment program before it mature if a medical policy was not purchased earlier.
The quantum of amount of term and medical insurances required will depend on the individual needs and financial dreams of the individual.
There are other types of insurances for a more comprehensive financial program but the above two types of policies above are certainly vital in the managing of your investment risks. It certainly is a folly to ignore the importance of insurance in the financial planning process.
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