The financial consequences of not having life insurance

Life insurance is one of those things many people prefer not to think about, often because it's associated with the uncomfortable reality of our mortality. However, the decision to forgo life insurance can have far-reaching consequences, affecting not just the individual but their loved ones as well. Let's delve into the real costs of going without life insurance, providing a comprehensive understanding of what's at stake and some suggestions on what you can do.

In this article:

• Leaving your loved ones struggling financially
• End-of-life expenses like funeral and burial costs
• Estate settlement which includes debt and inheritance
• Loss of future income
• Education and childcare expense
• Make the most loving and responsible decision

1. Leaving your loved ones struggling financially

Without life insurance, your dependents could struggle financially in the event of your untimely demise. This is especially critical for the primary earners in a family whose income supports the household’s lifestyle, pays the mortgage, and secures the children’s education.

What you can do Assess your family’s financial needs and consider a term life policy. This type of insurance can offer a substantial payout, ensuring your family's financial needs are covered without a significant monthly expense.

Designed to ease this financial burden when the unexpected happens, Set for Tomorrow - Short Term Cover Digital Life Insurance covers you in case you pass away, giving your family the financial support at their time of need.

When diagnosed with terminal illness, death benefit can be advanced to cover for expenses. The plan also gives an additional cash benefit if death happens abroad and if both the insured and the spouse died in the same accident and at least one minor child has survived. Additionally, within 48 hours of your passing, 10% of your insurance coverage will be advanced to your family in cash to help with immediate needs and funeral costs.

Learn more about FWD Set for Tomorrow – Digital Life Insurance.

2. End-of-life expenses like funeral and burial costs

End-of-life expenses, including medical bills and funeral costs, can be substantial. Dying needs a substantial amount that can deplete savings or add to your family’s burdens during a difficult time.

A Philippine Star article^[1] quoted data taken from Golden Haven Memorial Park showed that:

• Casket – At least P3,000 to as much as P75,000 for a casket depending on the type of material.
• Funeral cost – At least P10,000 for a budget funeral parlor, P15,000 to P250,000 for mid-range and as much as P500,000 for high-end funeral, depending on the arrangements including flowers and decorations, as well as the length of the wake.
• Burial costs – Private lots range from P65,000 to P100,000 while mausoleums cost a minimum of P1 million. Garden lots and estate lots are on the more expensive side at P2 million and P18 million, respectively.
• Cremation costs from P20,000 up to P65,000.

What you can do: A modest life insurance policy can provide peace of mind that these expenses won’t add financial insult to emotional injury, protecting your loved ones from unexpected debts.

3. Estate settlement which includes debt and inheritance

Without life insurance, any debts, including loans and mortgages, can eat into the estate you leave behind, significantly diminishing the inheritance your loved ones receive. In worst cases, your family might have to sell precious family assets to cover outstanding debts.

What you can do: Consider a life insurance policy large enough to cover your debts, ensuring you pass on an inheritance, not a legacy of financial stress and uncertainty.

FWD Set for Tomorrow - Estate Protector is ideal for golden-agers and high net worth individuals, offering lifetime protection until age 120. This plan ensures that the legacy you've built for your family is well-protected, even if you face a terminal illness. With a minimum benefit amount of Php 1 million, starting at Php 2,000 monthly or Php 21,000 annually, depending on your age, you can choose the payment period that suits you best: one-time pay, 5 or 10-year pay, or regular pay until age 120, renewable yearly.

4. Loss of future income

Your future earnings potential is an asset. If you pass away without life insurance, your family loses that asset, which can have significant long-term financial implications, particularly if you have children.

What you can do: Opt for a life insurance policy that considers not only current debts and expenses but also the future income needed to maintain your family’s standard of living.

FWD Set for Tomorrow - Income Protector ensures that your family is well cared for. If you pass away, your family receives 100% of the benefit amount, providing them with financial stability during a difficult time. Additionally, if you're diagnosed with a terminal illness, 100% of the benefit amount is advanced to support you and your loved ones. Future premiums will be waived in case of total permanent disability or diagnosis with any of the 42 critical illnesses defined in your policy contract, easing financial burdens.

For child protection, if your minor child loses both parents in the same accident, they receive an additional 100% of the benefit amount, ensuring their future is secure. Aside from that, your family will receive 10% of the benefit amount (up to PHP100,000) within 48 hours for fast funeral assistance, alleviating the immediate financial burden during a time of grief.

5. Education and childcare expense

If you’re a parent, your untimely death could jeopardize your children's future opportunities, including their education. Additionally, the surviving parent or guardian may face increased childcare expenses.

What you can do: Tailor your insurance policy to include coverage for educational expenses and additional childcare, ensuring that your children's futures remain bright and their opportunities intact.

FWD Manifest is an investment-linked insurance plan that offers robust life protection while intelligently growing your wealth. It allows you to invest with minimal market knowledge and maximizes your return on investment (ROI). Additionally, it includes multiple benefits to accelerate your financial plans. As a base plan, Manifest can be complemented with FWD Babyproof to fund your child's future. Babyproof caters to your baby's needs, providing life protection, investment opportunities, and hospital and ICU allowances if needed.

Make the most loving and responsible decision

The thought of leaving loved ones behind is difficult, but the implications of doing so without the safety net of life insurance can be devastating. The cost of life insurance is often far outweighed by the peace of mind it provides and the financial stability it can secure for your family in your absence.

Life insurance is not just a policy; it's a plan for protecting those you love from the unpredictable nature of life itself. Whether you opt for term life, whole life, or a combination of policies, the key is finding the right balance that offers you peace of mind today and guarantees security for your loved ones tomorrow.

In exploring life insurance, the true cost isn't found in monthly premiums but in the risk of going without – a risk that could leave your family facing financial difficulties in addition to emotional loss. Therefore, the most loving and responsible decision you can make might just be securing a life insurance policy tailored to your needs and those of your loved ones.

Find a life plan tailored to your needs

Find a life plan tailored for your needs and personal situation with the help of an FWD financial advisor. Click the button to book a free consultation.

Source:
^[1]Louise Maureen Simeon, Pinoys ill-prepared for high cost of dying – Philippine Star, March 12, 2024