When you hear the term financial protection, what immediately comes to mind are words such as “insurance” and pension”.
We often think of ways to grow our income and our businesses but we dislike talking about what might happen one day and how our loved ones would cope without us.
However, this is a problem we should very much discuss because we never know when something might happen to us or when our financial situation might change.
Financial protection is extremely important but before we delve deeper into why is that, let’s first define what it means.
Financial protection implies an insurance policy or policies that pay out in case something happens to you, your business, your estate, etc., depending on what type of insurance you get.
This means that you and your family will not need to worry because you will be financially protected. In the case of a life insurance policy, the total sum can be paid in full right away whereas income protection implies monthly payments.
In other cases, life insurance payments to your family members will be carried out on a monthly basis until the policy expires or when the youngest child reaches legal age.
It’s like a safety net because it means that if something happens and you’re no longer able to create income, you will be financially stable.
Individuals who are critically ill can also insure themselves and make the entire process a bit less stressful at least in terms of finances.
Below, we delve deeper into why financial protection is important.
It protects you and your loved ones
As difficult as it is, talking about the future is important, especially if you have a family to take care of.
You might be responsible for your spouse and kids or perhaps your elderly parents. Chances are that you have people depending on you who you would want to protect financially regardless of what happens to you.
For example, your business might be booming today so it’s hard to imagine rainy days when it’s sunny. However, if you protect your income and an insurance policy, the rainy days won’t be so gloomy after all.
The importance of a backup plan became even more prominent when COVID-19 hit countries worldwide leaving many unemployed, uninsured, and without a source of income.
Financial insurance protects both you and your family in this case because if you’re injured and unable to work, you will still receive regular monthly payments.
It gives you time to recover
Sometimes, people who become ill or have been in an accident that left them unable to work and provide for their families, are forced to shorten their recovery period and go back to work as soon as possible.
This may further prolong your recovery since you aren’t able to rest and the added stress of financial insecurity isn’t helping.
If you get financial protection on time, you will be able to afford the time necessary to fully recover and go back to work when you’re ready and not because you’re forced because you can’t pay rent and feed your family.
Securing yourself financially in this way changes things entirely as it takes the stress away.
Similarly, if you suffer from a critical or terminal illness, you are already facing enough stress and financial burden as it is without worrying about your family.
But when you start thinking about what your loved ones will do without you and how they will cope with the changed situation and loss of income, it gets overwhelming.
Critical illness insurance can provide the financial cushion needed at a difficult time and prevent going into debt or losing the house due to the inability to cover mortgage and treatments.
Financial protection comes in as a very comforting solution because the money can be used to pay for expensive treatments and make the process a bit easier. This means less worry for you and your family.
Getting health insurance is especially recommended to those who are self-employed and don’t have medical insurance covered. It’s easy to get carried away and leave this for later, but trouble can come unexpectedly, and it’s best to be prepared.
It gives you peace of mind
Another benefit of financial protection is that when things don’t go according to plan, your family has a safety net.
Life insurance gives you peace of mind that if death comes to you, your family won’t be left struggling to make ends meet or worse, lose the house because they can’t pay the mortgage anymore now that you’re gone.
This is something no one would wish upon their family which is why getting life insurance provides the much-needed protection from financial woes.
Financial protection is so much more than just being able to pay your bills when things get tough. It’s about securing your family’s financial stability and wellbeing, sparing them the stress of not knowing when the next paycheck is coming from, and protecting your own peace of mind.
Your choice of a financial protection plan depends on your priorities as well as your situation on the whole. There is a variety of insurance policies you can use to secure your future so if you’re not sure which one would be best for you, consulting a professional is always recommended.