When I was single, I never saw the need to take out a life insurance policy. There was no good reason I had no dependant and if I passed on, someone else would get the benefits anyway. So why bother with life insurance? Why not use my spare cash on something more interesting like a holiday or a new car?
Then I got married to my lovely jewel! This still did not change my views though; my only dependant was my wife. She could cope without me, and I was certain that she was not expecting any compensation if I was no longer there. So why buy an insurance policy when I could buy her the lovely things she wanted instead?
A few months later, the heavens smiled at us, and she became pregnant. The doctor informed us that we were having twins and I was overjoyed. At first, all I could think about was whether we would have a set of boys, girls, or both. Suddenly, a profound sense of responsibility came upon me. I pictured how my wife would manage if anything happened to me. I thought about how our kids would be able to have the standard of life I dreamt of if I was no longer there. This was a turning point for me. I was responsible for the happiness and well being of three people besides myself. Alive, I could strive to meet their needs but if I passed away, there was no one else to take care of them. The solution was obvious – a Life Insurance policy. This time my question was Why not Life Insurance? It did not matter if we could not go on holidays this year or get a new apartment, all that mattered was to see my wife and kids smiling – whether I was there or not.
Let’s pause a moment and reflect …
In Nigeria, and Africa in general, the mere mention of the possibility of death is considered a taboo. But there are inevitable factors such as death that could significantly change our lives and the lives of the people we love and care about. No one has control over life’s circumstances and events; hence the need to plan for the unforeseen.
A Life Insurance policy, which is a contract with an insurance company, enables you plan, and gives you the peace of mind to live your life without fear. In exchange for periodic premiums (payments), the insurance company provides a lump-sum payment known as a death benefit to the beneficiaries in the event of the insured’s death. Typically, the type of life insurance policy an individual purchases is based on their specific needs, which could vary due to several factors including the nature of their job, age and goals, amongst others.
Benefits of Life Insurance
- Those who depend on you do not have to suffer because you are not available to meet their needs. Life Insurance ensures financial continuity for loved ones left behind.
- Life insurance enjoys favorable tax treatment unlike any other financial instrument. Death benefits are generally income-tax-free to the beneficiary.
- Most life insurance policies are exceptionally flexible in adjusting to the policyholder’s needs. The death benefit may be decreased at any time and the premiums may be easily reduced or increased.
If you’re wondering how the story ended, we had a boy and a girl, and they are now 10 months old.
In our last article, your wallet and the decisions you make, we encouraged you to put in place a financial plan. Have you? What decisions do you need to make.