Use life insurance as social protection against untimely death – Rose Miller
Published:Tuesday | June 14, 2022 | 12:07 AM
The sudden passing of the chief breadwinner can often throw a family into chaos, especially if there was no financial plan in place to provide for the family’s expenses. It is why Rose Miller, team lead for the JN BeWi$e Financial Empowerment Programme, is urging persons to purchase life insurance to provide protection from these untimely occurrences and financial shocks.
The grants manager of the JN Foundation said that life insurance is a good instrument to have in one’s financial toolkit as one of its main benefits is financial security, helping to secure a family’s future when the chief breadwinner is no longer around.
“When considering insurance, the ideal is for each member of the family to have some amount of coverage; however, much more emphasis and a greater level of coverage should be placed on the breadwinners. Many families go through life-changing experiences when the chief provider passes on. Dreams are dashed. There is tremendous uncertainty and a sense of desperation if no financial provision was made for the family,” she said.
Miller gave the advice while facilitating the Council of Voluntary Social Services (CVSS) ‘Skills on the Go’ virtual financial literacy workshop recently.
“At the very least, each family should have a plan in place to take care of final expenses.”
One plan that she strongly recommended is a family indemnity plan, which, she said, takes care of final expenses for up to six members of the family. Persons pay a single premium to maintain the policy.
She added that insurance can also be used to create wealth and stressed the importance of persons accessing insurance when they are young as not only are the premiums less expensive, but they will have the benefit of a longer time horizon for the investment to grow.
The team lead for the BeWi$e Financial Empowerment Programme also pointed out that insurance should be considered as an important part of financial planning because of its ability to create, preserve, and transfer wealth.
“Life insurance gives you the option to leave a legacy for your family. It acts as a safety net hedging against events such as sudden illness or death, resulting in loss of income,” she explained.
She said the appropriate plan also allows persons to invest regularly, growing wealth via funds that are professionally managed while at the same time obtaining life coverage in the unfortunate event that persons pass on prematurely.
“It is also worthy to note that proceeds from insurance are not taxed. Insurance is that tool which will help you to recover financially from various unforeseen situations and ensure that all your savings or investments are not used up to get you back on your feet. You can pay premiums incrementally; therefore, you are ready for these eventualities. Yes, you might be able to cover these costs out of pocket or get a loan. However, if you have insurance, you would be prepared, and, therefore, able to access the funds to offset the costs, preserving your cash,” she explained.