I work as a fieldman driving 80 kms per day on average. This makes my job of higher risk compared to those working in the office. Because of this, our company provides us with insurance. Aside from this, I availed a term insurance so that I am still covered even if I am already unemployed.
But what is insurance for, really?
The purpose of insurance is simple: If God calls you home today, your children will not go hungry.
Buy insurance if you have people depending on your income. Not when you do not even have kids or aging parents to support. So that when your income disappears because you disappear, the insurance money will take care of them.
Plain and simple.
Buy Term Insurance
Wikipedia defines it as this. Term insurance is a type of life insurance policy that provides coverage for a certain period of time, or a specified "term" of years. If the insured dies during the time period specified in the policy and the policy is active - or in force - then a death benefit will be paid.
For people like us who are learning how to invest, we should buy pure and term insurance.
We avail of term insurance while we build our wealth with the goal of being self-insured. This is mainly because building wealth does not happen overtime. It takes years. And while we are in the process of doing that, we buy term insurance.
It is the cheapest insurance. How cheap you may ask? In my case, at age 31, with Php1 million coverage (which doubles in case I die by accident), it costs Php5,340 per year.
So my suggestion is, buy only what you need. Buy term insurance and invest the difference.
Happy investing!
