You don't have to buy insurance if you don't want to!


Tuesday, 17th May 2016

There are many people who have bought life insurance policies without understanding the purpose behind the policies. Most life insurance policies are bought based on recommendations by agents or financial advisors who may or may not act in the best interest of the clients. Apart from needs, policyholders should also consider affordability, not just within the first one or two years, but over the term of the life insurance policies. 

The overarching objective of life insurance is protecting the policyholder and/or the dependents from financial losses in the event of untimely death, disablement, critical illness or old age. Based on this, where there is no dependents, potential financial losses or no untimely death, disablement or illness then where is no need for life insurance. Additionally, if one has or can save a sufficient amount of emergency funds to mitigate these potential financial losses, there will be no need for life insurance policies.
In countries where estates are subjected to substantial duties or taxes, life insurance policies are often used to provide for immediate cash to pay the taxes and free the estates. Trusts, especially Living Trusts may be created using proceeds from life insurance policies.
In the coming articles we will explore the various options available to avoid buying life insurance policies or at least reduce the quantum required. Meanwhile, give us your feedback or pointers to enable us to provide more useful or relevant informations. We also welcome questions which may be bothering you.

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