In the hustle and bustle of everyday life, the truth is that many people don’t contemplate the possibility of an early death. However, the fact is that people die prematurely. It is sometimes possible that the departed leave behind huge hospital bills.
The major role played by an insurance cover during such times is usually ignored, yet insurers can shoulder the financial burden bringing much relief to the bereaved family.
Another benefit of life insurance is that it acts as a hedge against loss of income. The ability to earn is usually our most valuable asset, but it can be lost through disability. Losing one’s source of livelihood, leads to a sense of hopelessness, and the prospect of being dependant on others.
Savings tool: Life insurance can also be used as an investment and savings tool. Life covers as vehicles for investment are presumed to be insensitive to inflation. However, a well thought out and annually reviewed insurance plan guards against inflation.
In a competitive market and heightened consumer awareness, insurance products have been innovatively packaged to cater for pressing needs for present consumption as well as for future protection. This means consumers buy insurance at cheap premiums to protect their families.
False sense: A major reason that prevents many people from taking out life policies is the thought that they are adequately covered by their employers. However, this is a false sense of security because being an employee is not a permanent state.
In hard economic times, people have been retrenched or retired. When an employee and employer separate, it means the employer stops paying insurance premiums.
Hence, a financially savvy employee should ensure that they take their own cover while still in employment.