When most people think of life insurance, their minds jump straight to death benefits. It’s often viewed as a financial tool that only kicks in after we’re gone. But this limited perspective overlooks the numerous emotional, financial, and economic benefits that life insurance offers during your lifetime and after.
Let’s explore the lesser-known benefits of life insurance—ones that you may have never considered but can play a significant role in your financial planning.
It’s A Financial Tool That Does More Than You Think
Many need to realize that life insurance can be a versatile financial asset. Some plans not only provide coverage in the event of death but also allow for partial or full withdrawals while you’re still alive. For example, specific policies, like SmartLife and SmartLife+ by AXA Mansard, combine target savings with life insurance, allowing you to withdraw funds after a set period. This means you can access your savings to buy a house, fund children’s education, car, or other significant life goals without waiting until the policyholder dies.
You Can Use it as A Built-In Emergency Fund
Another benefit of life insurance that often goes unnoticed is its coverage for unexpected life events beyond death. Policies often include provisions for accidents, medical expenses, or even permanent disability. This means that life insurance can act as an emergency fund, ensuring you aren’t stranded financially if life takes an unexpected turn.
With life insurance, you’re preparing for the long term and safeguarding yourself against immediate financial uncertainties, providing both peace of mind and a stable fallback plan in times of need.
It Can be A Smart Savings Plan for Your Future
Life insurance isn’t just for older adults nearing the end of their careers. In fact, starting a life insurance policy when you’re young can provide you with a unique savings opportunity. As a younger person, you can pay into a life insurance policy over time, slowly building a substantial sum that can be accessed later in life. For instance, setting aside N10,000 a month beginning at age 20 could lead to significant savings over 20 years, allowing for financial stability down the road without requiring a hefty monthly payment.
It Can Provide Emotional and Psychological Comfort
It’s easy to focus solely on the financial aspects of life insurance, but there are also substantial emotional and psychological benefits. Having a life insurance policy offers a sense of security—not just for you but your loved ones. You can live your life with the comfort of knowing that your family will be taken care of in the event of your death. This peace of mind is invaluable.
You Can Build an Economic Legacy
Life insurance also plays a significant role in building an economic legacy. It’s not just about protecting your family during a tragedy; it’s about creating a stable financial foundation that can be passed down to the next generation. By ensuring that your family remains financially secure even after your death, you’re investing in their future success. This could mean funding your children’s education, helping them purchase a home, or supporting their entrepreneurial dreams.
Life Insurance as a Holistic Financial Plan
In the end, life insurance offers much more than just a payout in the event of death. It’s a comprehensive financial tool that provides flexibility, security, and peace of mind. Whether delivering a built-in emergency fund, helping you accumulate savings, or offering emotional reassurance, life insurance delivers often overlooked benefits.
So, when thinking about life insurance, remember—it’s not just about death. It’s about living well, with confidence in your financial future and the security of knowing that your loved ones will be cared for, no matter what life throws your way.
