Insurance provides protection from financial loss that can be caused by a possible eventuality. Simply put, it can provide money in case something bad happens. Many persons often dislike insurance because they believe they’ll spend more than they will benefit. However, that is not always the case and having insurance is really about managing risks/uncertainty and protecting against huge financial losses.
There are various types of insurance, however some of the most important ones to have in order to build a strong financial foundation, generate and maintain lasting wealth are those that cover your life. These include, health insurance, critical illness insurance and life insurance. Let’s take a closer look at each.
Health insurance covers whole or part of medical expenses ranging from a doctor’s visit to major life saving surgeries. Having good health complements a strong financial foundation. There are a few basic procedures that are recommended to ensure that your health remains at an optimal level, for example doing an executive profile (a thorough medical) once per year and a dental cleaning twice per year. These simple procedures may not cost a lot on their own, but you never know when you may have another illness for which treatment can be costly. Having health insurance can help you cover some or all of the costs of these medical expenses. What is the purpose of having huge sums money if you’re not healthy enough to spend it on things you actually enjoy? Yes, there is a cost to have this benefit especially if it’s not provided by your employer but it’s really about managing uncertainty and preserving your wealth. If you don’t have health insurance coverage through an employer, you are still able to get this benefit on your own from a life insurance company.
Critical illness insurance can provide a lump sum upon diagnosis of a sudden or severe illness. Statistics have indicated that non-communicable diseases (NCDs) are the leading cause of death in Jamaica. NCDs include cardiovascular diseases, heart attack, stroke, cancers, chronic respiratory diseases and diabetes. While these illnesses are often fatal, it may still be possible to survive and/or continue to live with these illnesses if you’re financially able to do so. Having critical illness insurance can offset some or all of the costs of the associated medical expenses and recovery care should you be diagnosed with an illness that is covered by your policy. It is encouraged for you to acquire this type of policy especially if you have a family history of these illnesses. This type of coverage is available from a life insurance company and some financial institutions. Their website should provide general information, however, speak to a licensed representative for more details.
Life insurance provides a benefit upon the death of the insured person. No one likes to think about death, but it can be considered as one of life’s certainties. While you won’t know the day you’ll die and even if you may be able to anticipate when that may be, more often than not, this is at a point in which you’re ineligible to acquire life insurance. Life insurance is essential if you have persons who depend on you financially, especially if they are not able to generate an income on their own. Should you pass, life insurance can assist with final expenses and help your loved ones transition through what will be a difficult period. This is also a way to pass on financial stability and create a strong financial foundation for your future generations. Even if you don’t have dependents, life insurance is also needed should you want to acquire property. While the property is the underlying asset for a mortgage, financial institutions want to ensure they can quickly cover any outstanding balance should you pass prior to paying off that mortgage. At some point you may need insurance, so it’s often recommended to get it as soon as possible because the cost is primarily based on your age. The type and the amount of coverage you will need is something you’ll need to discuss with a licensed insurance agent who can facilitate the necessary assessments and advise accordingly.
If you currently do not have any or all of these insurance coverages, I encourage you to get started or review your coverage and adjust as needed. No matter what age you are, insurance is definitely something to add to your financial portfolio in order to create generational wealth.