Purpose of life insurance: Why do you need to buy insurance?

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Here are the top reasons why you should get insurance.

1. Cover from the government is not enough.

If you are employed, you should have at least two types of cover: PhilHealth and SSS. PhilHealth provides relief during times of sickness and hospitalization, while SSS takes care of your sickness, maternity, retirement, disability and death benefit.

These government programs are not enough to provide the level of cover that you actually need.

SSS and PhilHealth only pays certain amount for each specific disease or medical condition, and you will end up paying most of the bill if you are confined in a private hospital with a critical illness such as cancer, stroke and heart attack.

2. Protect your income

You will still have money even when your active income stops.

When you are not able to work, like suffering a major disease or being disabled, the insurance company will pay you benefits.

That’s why insurance is also called income protection. It protects you from life’s uncertainties, making sure that you have funds for you daily living during difficult situations.

3. Protects your wealth

You have heard of people selling their properties at a bargain price to pay for expensive medical bills. Even wealthy people can become poor overnight when emergency situations occur.

These are events that could have been avoided with insurance. It preserves your investments and assets, and in turn your net worth, from being sold off, often at a lower price, because you are in desperate need of money.

This is the reason it is called wealth protection. It acts as a cushion from financial ruin brought about by life-events. Instead of selling your assets—such as your house, car or business—to pay for any unexpected expenses, your insurer will help take care of them.

4. Takes care of the people dear to you

Because of insurance cover, your family can expect financial help should you die too soon, get really sick or be disabled.

It helps pay the cost of medical care. It can also take care of funeral and burial expenses in case of your untimely demise. And it may even provide your family income for a period of time to allow them to live on free from financial problems and big amounts of debts.

A life insurance, if you may, is your last act of selflessness.

5. Peace of mind

Knowing that you are insured can give you peace of mind.

It can give you a sense of security, especially that you will not have to borrow huge amount of money and that your family’s well-being will be safe if anything happens to you.

This is particularly true if you are the breadwinner. The people you love the most  will have less worries during life-threatening situations.