10 Ways to Use Life Insurance Proceeds Wisely in the Philippines

Introduction

Life insurance is one of the most sensitive instruments that provide a monetary benefit upon your passing. In the Philippines, applying the proper use of life insurance pay is one of the crucial ways for each loved one to obtain the best financial interest in life. Here are ten ways to take the most of life insurance proceeds, taking the combination insights from YouTube channels of Wealth Arki and Ready To Be Rich.

Pay Off Debts

Perhaps the most immediate and practical manner to make the most out of your life insurance proceeds would be to pay off your outstanding debt. This includes your mortgage, car, credit card and personal loans, among others. By paying off these debts, your beneficiaries relieve the financial stress they may incur and secure their future. Wealth Arki cited the importance of paying off debts with higher interest first.

Covering Daily Living Expenses

Life insurance proceeds will ensure that your family gets to keep up with their standard of living, including their house bills, groceries, transportation, and other utilities, as well as healthcare costs. Ready To Be Rich advises the creation of a budget to control these finances so that they can cover expenses over the long term.

Expenses for Education

This is another significant expense that you can plan by using your life insurance proceeds. Whether yours or your grandchildren’s educational needs, a part of the expense can be allotted toward paying for tuition fees, school supplies, and various costs. It is contended by Wealth Arki that education should be a priority if you want your dependents to have a brighter future.

Business Ventures

For business-minded beneficiaries, life insurance proceeds can well be a setting stone to starting a business or expanding one. This, in a way, can set up a continuous income flow and financial sustenance. Ready To Be Rich advises you for proper market study and contingencies through a proper business plan when you route your funds into a business.

Establish an Emergency Fund

An emergency fund is the backbone of financial independence. By using some of the life insurance benefits to establish or boost an emergency account, one can develop and relieve financial pressure when unexpected expenses, such as medical care or house repairs, arise. Wealth Arki advises to save at least three to six months’ worth of the living expenses for emergencies.

Invest In Stocks or Mutual Funds

Investing the life insurance proceeds in the investment options such as stocks, mutual funds, and other investment vehicles can help in increasing the funds over time. It can also serve as the long-term financial security where one can earn extra through capital gains and dividends. Ready To Be Rich suggests consulting a financial advisor to set an investment portfolio and its allocation in different classes in line with financial objectives and risk appetite.

Real Estate Investment

A property investment is an excellent tool to realize tangible assets with market value that can appreciate over time. In Investing the life insurance benefits into property, one will be assured of a stable home for your family or provide a rental income. Investment advisers at Wealth Arki recommend consideration of the site of investment and the potential appreciation of the value.

Create a Trust Fund

A trust fund is a channel in which one can manage and safeguard the life insurance benefits for the advantage of loved ones. When you set a trust, you dictate how the funds are utilized and the pace in which they get to access it. Ready To Be Rich recommends getting the counsel of a qualified attorney in setting up the right trust that will meet your needs and produce the best benefit for your beneficiary.

Donate To Charitable Organizations

If you have a human side for philanthropy, insurance proceeds can be contributed to various charitable organizations in memory of yourself or the loved one. Or you can set up a charitable foundation in your name. According to WealthArki, you still have to do research on the charities you contribute to, so that each peso you contribute is put to good use.

Retirement Savings

Having received a life insurance payout, older beneficiaries can now double their retirement savings. Retirement savings can be in the form of funding retirement accounts or buying annuities that provide steady income. According to Ready To Be Rich, plan carefully in advancing retirement savings so that each centavo serves you in your retirement years.

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