In this fast-paced, cut-throat world of survival, how often do we think about how much our lives are really worth? The answer is, of course, priceless. But there is such a thing as a human economic value. This includes our financial assets and liabilities as well as our potential income during our lifetime. And much of this human economic value actually goes to survival expenses, probably education expenses, retirement expenses, and legacy expenses to name a few. Needless to say, the kind of life we are to live today and tomorrow is largely influenced by our human economic value. Perhaps the best way to ensure that our economic value remains intact is to purchase life insurance. Life insurance guarantees that economic resources are available when you need it most. There are three contingencies that affect one’s human economic value, namely: being disabled, dying too soon and living too long. All of these contingencies affect one’s capacity to earn income and provide for one’s survival and that of those dependent on him. Life insurance may address one or all of these contingencies.
Being disabled cuts income, due to inability to work, and increases expenses with medical and hospitalization needs. Without ample provision for this contingency, disability can, result in an impoverished life. Life insurance can provide disability benefits that will provide income when there is no income coming in from employment or business. In the US, the government gives Social Security Disability Income to those eligible, meaning those who have worked for quite some time in companies with Social Security benefits and those who have duly paid their Social Security taxes. Life insurance with disability benefits can also waive premiums during the period of disability without terminating your coverage. Living too long, just like being disabled, entails a decrease in income and an increase in expenses. A lot of people work their whole lives only to grow old as a destitute because they were unable to prepare for old age. Those eligible for US Social Security benefits can file for retirement income benefit.
A large majority of the population, however, can benefit a great deal from purchasing their own life insurance with retirement benefits. Some life insurance products give medical and critical illness benefits as well. Dying too soon leaves financial burden to the surviving family in one form or the other. Whether it be hospitalization and burial expenses, outstanding loans or the loss of prospective family income, this contingency has an impact in a family’s economic life. With life insurance, the surviving family need not suffer the brunt of such economic loss. Life insurance can be purchased to cover either an amount representing what the family needs to survive after the loss or an amount that would prospectively be used to settle bills pertaining to the loss, i.e. medical and burial expenses. Life insurance covers the economic loss resulting in the death of a family member, especially that of a breadwinner, and allows the surviving family to be able to sustain their way of living. What type of and how much life insurance one needs to purchase depends on which of these three contingencies one intends to prepare for. Whatever form the life insurance product takes, it should ultimately cover your human economic value.