7 Financial Benefits of Life Insurance for Filipino Families

Introduction

Life insurance is important in insuring the financial future of every Filipino family. In addition to the death benefit, life insurance incorporates several financial benefits that may safeguard a loved one, so they are assured comfort. Here are seven of the turning points of life insurance for Filipino families gleaned from Wealth Arki’s and Ready To Be Rich’s YouTube channels.

Income Replacement

One of the most significant functions of life insurance is to replace lost income in the event of the insured’s death. This ensures that the surviving family can live with no further stress and maintain its current standard of living and meet basic needs, such as for housing, education of children, and daily expenses. In this regard, Wealth Arki stresses that one has to use a coverage amount that can ably replace the income influences to support the financial needs of the family.

Debt Settlement

Life insurance can be used to settle any debts, including mortgages, car loans, and balances on credit cards, that one might be paying at the time of the demise of breadwinners. Settling these debts means that the loved ones left behind will not be strained further and the valuable assets protected from creditors. According to Ready To Be Rich, one must allocate the amount payable to settling the debts with high interest to minimize the interest cost and make the most out of the proceeds from the insurance.

Cost of Education

Life insurance provides a cost for a blessing to the Filipino families with children. It may be designated for expenses related to tuition fees, books, and all other costs needed for the education of the children, which therefore means that the children do not have to compromise just because an insured person died. Wealth Arki also suggests considering the cost of future education in deciding these policy coverage amounts.

Emergency Fund

Life proceeds can integrate an emergency fund, increasing the financial safety cushion for unexpected expenses and income disruption. The presence of good emergency funds ensures that a family will meet essential costs in times of adversity that could arise because of medical emergencies, lack of enough income, or natural disasters. Wealth Arki states that the advisable amount for an emergency fund is at least three to six months of one’s cost of living to cushion them from probable financial shocks.

Estate Planning

Life insurance is useful for estate planning for Filipino families, more so for those that hold significant assets. The death benefit will support estate taxes, probate, and other expenses related to asset transfer to beneficiaries. Strategic inclusion of life insurance in an estate plan ensures families lower any tax burdens they might incur, thus swiftly transferring the legacy to subsequent generations. It is crucial to talk to financial advisors or estate planning professionals in creating a comprehensive estate plan that supports the interests of targeted family members. Wealth Arki states that one should.

Business Continuity

For business-owning families, life insurance ensures that the business continues even if the owner is no longer present. This death benefit may be used for the purchase of the deceased owner’s share of the business, reimbursement of business debts, or other customary financing for the succession plan. This makes it easier for the business to continue operations and for family members to be paid equitably for such interests. A Ready To Be Rich article recommends adding life insurance to the business’s succession plan to guarantee the family’s adequate protection and the business’s continuity.

Life insurance can be a tool for the accumulation of wealth and legacy planning for Filipino families. This is because all permanent life insurance products, including whole life or universal life insurance, are designed with a cash value feature. Over time, this feature allows the cash value to be accessed during an insured’s lifetime through policy loans or withdrawals, thereby providing supplemental income or funds for retirement.

Moreover, the death benefit can go to the heirs or charitable causes, creating a lasting legacy that represents the family values and priorities. In this regard, Arki brings out an idea to explore different life insurance options until one finds the best-suited policy that genuinely translates into the goals of family finance and legacy planning.

Conclusion

Life insurance benefits obviously include the obvious such as income replacement, debt repayment, education funding, emergency savings, estate planning, business continuity, wealth accumulation, and legacy planning—all rolled into a single proposition for the financial betterment of Filipino families, across all types. By knowing and taking lessons from these benefits, together with further knowledge infusion from Wealth Arki and Ready To Be Rich, help families make wiser decisions in carefully selecting the right policy based on their insurance needs to ultimately protect the future of their loved ones in life.

A multi-award-winning blogger and advocate for OFWs and investment literacy; recipient of the Mass Media Advocacy Award, Philippine Expat Blog Award, and Most Outstanding Balikbayan Award. Her first book, The Global Filipino Bloggers OFW Edition, was launched at the Philippine Embassy in Kuwait. A certified Registered Financial Planner of the Philippines specializing in the Stock Market. A recognized author of the National Book Development Board of the Philippines. Co-founder of Teachers Specialist Organization in Kuwait (TSOK) and Filipino Bloggers in Kuwait (FBK). An international member of writing and poetry. Published more than 10 books.  Read more: About DiaryNiGracia