Over time, people have come to realize that insurance can play a vital role in maintaining a stable lifestyle. People, particularly in Pakistan are now associating health and life insurance plans as a precautionary and preventive measure to facing financial trouble in the future. Although the awareness is there but swift action is still missing.
Here, we help to identify the reasons why insurance is necessary and the importance of insurance coverage, that can help you manage your medical or accident related emergencies:
- Smart people buy insurance policy for peace of mind and to secure the future of their families. Insurance cover does not only protect the family in case of any eventual situation but also safeguards life in old age. When the time comes and the policy matures the right policy will enable you to send your children abroad for higher studies and pay a monthly amount as retirement pension.
- The foremost question that arises in mind is “when should I get an insurance policy”? The answer is quite simple; the sooner the better. Truly speaking, a person should get an insurance policy from the first month of his employment; there is a good reason to do so. Average life span in our country is 60+ years. Now suppose if a young person, 25 years of age, plans to buy an insurance policy of Rs. 1 million he or she has 35 years to pay the premium. This inherently means that the premium amount will be quite low for the rest of the individual’s life. A person can always add to the insurance policy as they grow older. On the other hand, when a person of 40 years of age buys an insurance policy for the same amount, their insurance premium would naturally be much higher. This is because they have lesser number of years till retirement, to pay the full premium. Additionally, health concerns for a younger person are much less in comparison to an older person, therefore, premium becomes more expensive too. This does not mean that you should not invest in an insurance coverage. It can help you to manage your health and medical emergency expenses easily if you have ample health coverage.
- One must also appreciate that paying insurance premium is not an expense, it is a saving. In fact, to put it in the right words, it is compulsive saving towards health and life insurance, which would otherwise be spent on expenses. It is often just extremely difficult to save on your own, and is far easier when you have to pay a monthly amount that is blocked into an insurance plan. Insurance companies usually announce bonuses at the end of each year on the number and amount of premiums paid. These bonuses are added to the insured amount and are given when the policy matures or in cases when the policy holder has passed away.
- Insurance policy is also a secured retirement plan. If bought at the right time, it usually matures when the retirement is due or has already taken place. When a policy matures and the policy holder receives the money it can be double the amount originally insured. This is because the bonuses announced by the insurance company throughout the policy period are also added to the principal sum.
- Policy holder can also avail loan facility from the insurance company in case of any emergency or an urgent need like a wedding in the family, purchasing a house or going for hajj. The extent of loan depends on the number of premiums policy holder has already paid. Generally, 50-60 percent of total premiums paid can be availed easily. This is indeed a great facility in need and policy holder does not have to borrow money from the bank.
Life is unpredictable; no one knows what may happen in future. A health or life insurance plan can help bring predictability in life, as you can use it to avail several benefits, be it paying for hospitalization, taking a loan against your policy, or receiving a post-retirement pension. You can always look through different insurance plans and find out what other options for insurance, like travel and auto insurance, work for you, other than health and life insurance.