Two Reasons To Get Life Insurance in Hong Kong
Being a wife, and especially a mother entails a lot of responsibilities. Once you start making your own family, you stop living just for yourself. That is love for you. It is a wonderful feeling that keeps you selfless and considerate of those around you.
When it comes to your spouse or your children, it is natural to want to do anything for them. You want to protect them – even beyond death.
If there is one way that you can protect your family, it is through a life insurance. This is a policy that you will pay for to ensure that if anything happens to you, they will get a claim. Death is a devastating reality that we all need to experience at one point in our lives.
Since it is a certainty, it should give you all the more reason to prepare for it. This is why a life policy is important in this day and age.
According to an article published in the South China Morning Post, even those from mainland China are buying life policies in Hong Kong. While their reason to do so is more of to protect their finances, they understand that it is one investment that will give them a lot of benefits.
As a long-term investment, it will give the holder or their beneficiaries a return of 5% to 6%. Although this is not a guarantee, this is still an added benefit to the security that it will bring to your family in the event of your sudden passing.
Two important reasons to get a life insurance
There are two important reasons a life insurance is an absolute must-have. If you find any of these to be true, you know that a life policy will help protect your family in case the unthinkable happens to you.
If you are the sole breadwinner in the family.
The first reason why it is important for you to get a life insurance is when you are the sole breadwinner in the family. According to the Hong Kong Census and Statistics Department, single mothers in Hong Kong increased by 35.6% from 2001 to 2011. In fact, 82.2% of those between the ages of 30-49 years old are single mothers.
If you are part of this statistic, then you know that your child or children need to be protected. In case something happens to you, where do you think they will end up? You are the sole source of finances for the family.
If your kids are still young, how do you think they can cope when you are gone? Since you do not have a spouse who can legally take care of them, who will shoulder their financial needs.
You have to think about their future – specifically their finances. At the very least, you should give them enough financial support to help them get the education that will allow them to support themselves. It is a nightmare for a mother to see their kids be left with nothing. If that is not enough reason for you to get a life insurance, then what is?
If you borrowed a lot of money.
Another reason for you to get a life insurance is when you have amassed a lot of debts. This does not really make you an irresponsible wife or mother. It may be caused by the mortgage that you borrowed so your children will have a place to call their own.
According to the Hong Kong Economy, during the 3rd quarter of 2015, 33% of the owner-occupied homes in Hong Kong have mortgages or is tied to a loan. This is 17% of the overall households in this region.
A home loan is a very big debt to leave to your loved ones. This does not even include any credit card debt or personal loans that you have accumulated over the years. Your life insurance can be used to pay these debts.
If any of these scenarios are true, then you know that it is a must that you get a life insurance. Your loved ones will be grieving your loss. Any financial problem will make it even harder for them to cope with a life that no longer includes you.
Tips to decide how much coverage you will need
Deciding to get a life policy is one thing. Calculating how much you need in the coverage is another thing. You do not want to spend too much on it because it can compromise the amount that you should be enjoying while you are alive.
At the same time, you do not want to spend too little because it might not be enough for those you will leave behind.
Here are some tips that you can use to determine your life insurance coverage:
- The main consideration here will be the people who are dependent on you – specifically, those you are supporting financially. If you die or even get sick, what amount do you think you or your loved ones will need to survive? Obviously, it would be hard to come up with an accurate amount but at least, you have to guarantee that the first few years will not be hard for your spouse or children.
- Take into consideration your assets. If you are a homeowner, this is something that you can also leave your spouse or children. They can choose to liquidate this or live in it. Either way, it will reduce the finances that they will need to survive. They only have to think about their daily needs.
- Debts. If you have debts, your assets may be enough to take care of it – or maybe not. Assume that your debts will not be paid off – this is why your insurance should be bigger. Do not pass the burden of debt to your children or those you will leave behind. It is hard enough to live without you. Knowing that your debts will make their future uncertain will evoke negative feelings that you do not want them to have when you are gone.
- Insurance costs. Finally, you have to consider how much the insurance coverage will cost. The higher the coverage, the more expensive the premiums would be. Although we want to leave a big amount to our loved ones, if that is not feasible, then be practical.
A life insurance may be for the benefit of your loved ones – and not yours. But in the end, their future should be made secure – even when you are gone. There is nothing wrong with preparing for the unexpected.
It will not only give you a sense of security, but it will also help you be more confident about the risks that you will take – which in the end, can be very rewarding.
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