Do you want to improve your financial life this coming 2021? Great! A lot of people struggle so much and are so oblivious when it comes to financing. We’ll guide you on how to handle and secure your money correctly!
Many people don’t have the word “insurance” in their vocabulary and find it boring. But as you get older, you’ll start to appreciate the beauty of life insurance more and more.
So what is life insurance?
Life insurance is a contract between the client and the company. The client will pay the life insurance company a monthly fee in return for a more significant amount of money when the client dies or a critical event occurs as agreed in the contract. To summarize, it’s basically a financial security for you and your family, especially if you’re the breadwinner.
These days, the popular type of life insurance is called VUL or variable life insurance. It has an insurance + investment component. The insurance part is your protection, while the investment can serve as your savings or retirement fund. Keep in mind though that when investing, the projection must always be long-term. The investment benefits are usually felt in a couple of years, so be prepared to invest in, long term.
When do you start investing in life insurance?
The best time to start investing in life insurance is at a young age or as early as possible. The earlier you start, the more time you have to build your wealth and savings, and hence you become more financially secure in the long run. You don’t need to force yourself to get life insurance once you get a job for the first time. You can do so in your late 20s or you can get one when you already have a stable income.
Keep in mind that some life insurance companies charge higher monthly fees to those of older age. The older you are, the shorter the time you have to live and pay your insurance company. But if you start younger, you’re more likely to have a more reasonably bargained insurance contract. Your youth is your advantage in investing in life insurance.
What to look for when choosing your insurance provider
The first and most crucial step is finding out if your provider is approved by the Insurance Commission in your country and if it has a good reputation and reviews. Do your research, ask your family and friends about their experiences with their life insurance providers. Look for a provider that has a fast, easy, and convenient system to use. So being able to communicate easily with an insurance agent is necessary.
The second step is to look at the financial strength/status of your desired insurance company you want to invest in. As for me, I am with PruLife UK, and it has a solid track record in the Philippines, so you need not worry. In fact PruLife is the number 1 insurance company in the Philippines in 2020.
Which life insurance do you need to invest in?
There are three types of life insurance: Term life insurance, whole life insurance, and endowment.
Term life insurance is limited to a fixed number of years. It’s usually the most affordable among the three, and it’s the most basic type of life insurance. However, you won’t get any added benefits or investment returns with this type of life insurance.
Whole life insurance provides coverage for the insured and covers the investor until they pass away. There’s no limit for this type of insurance, and you will receive cash benefits and dividends. It may be more expensive than life term insurance, but that means the investments are better! This is best for investors who intend to secure their children’s future.
Endowment has both the features of term life and whole life. It has a term limit but will provide death benefits when you die after the term limit. This can be used for retirement plans, college funds, future hospital bills, and many more.
Do you want to talk to a financial advisor? I give free financial planning and consultation online. It’s safe and secured, so you need not worry. You can also email at email@example.com/ firstname.lastname@example.org or text at 09171642324. See you!