Life Insurance is the cheapest form of Inheritance.

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Why do people need to buy life insurance? If you are someone who are just an average earner and are bound to be your family sole breadwinner. Life Insurance is the best solution just in case you lost your life. Death is one of the surest things that will happen to anyone. When it will happen, still remain a question. It is our prerogative to prepare our dependent/s when these things happen. It is best that we make the necessary arrangement to save a little of our income to pay for the premium of our life insurance.

The premium is based on the person’s age.

 I have the following scenario as an example:

 Ben, John & Sam are at the same age;

 When they are at age 25, Ben bought his life insurance coverage of P 500,000 ($10,000), his premium was P 9,229.75 ($ 184.60) a year for next 5 years. But the coverage is lifetime until his age 100

 John on the other hand bought the same life insurance at age 35, he’s paying P 26,715.00($ 534.30) a year

 Sam had the same plan at age 45, his premium was P42, 815.00 ($856.30) a year

 The example above shows that the younger the person, the cheaper the premium. The older ones have to pay more. It is because of the mortality age, but this is another topic for us to discuss. Imagine if Ben die at age 30, his dependent/s will be receiving P500,000.00 ($10,000.00), but his total amount paid premium for five years is only P 46,148.75 ($922.98) which is only less than 10% of the total amount of coverage that was given to Ben’s beneficiary or dependent.

 It is the most affordable inheritance that you can leave your family because you don’t need to save much. You are not required to build up the amount of coverage. What you just need to do is to save for the annual premium. What is good thing about this is that most of the life insurance companies can offer a quarterly or semi-annual premium scheme; it depends on your capability to pay.

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