HOW MUCH LIFE INSURANCE IS ADEQUATE

In taking out a life insurance policy, it is important to know how much life cover is needed.
There are several factors that determine the amount of life insurance cover a person needs to purchase.

The factors to be taken into consideration include the following:

• The age of the proposed assured
• The age of the spouse
• The annual income of the proposed assured
• The annual income of the spouse
• The number of dependant children and their ages
• The estimated cost of college education for children
• Spouse desired retirement age
• The value of investment portfolio
• Balance on RSA retirement account
• Size of existing life cover
• Projected funeral and other death expenses.
• The investment rate
• The inflation rate

 These data are keyed into a life insurance calculator developed by Hillcrest Professional Services to determine the size of cover to purchase and the likely premium. To request for the Life Assurance calculator please send an email to info@hillcrestprofessionals.com

WHY INSURANCE IS ESSENTIAL FOR FINANCIAL SECURITY

 

FINANCIAL COMPESATION: 

Financial compensation to the person to whom the policy is entitled   in the event of actual occurrence of  loss or hazard/damage where applicable.

 RELIEVES WORRIES & ANXIETY (Peace of Mind)
It relieves worries and anxiety that they may have about how they would meet the cost of risk, that is,it gives peace of mind. In the case of business, this is a positive stimulus to their activities and also allows them to get on with their own business, knowing that they are financially protected against many forms of risk. 

STIMULATING BUSINESS GROWTH & DEVELOPMENT
Business people will be more inclined to risk their money ( flying planes, building factories, transporting goods through the high sea, production of goods and services) with the knowledge that they will not lose everything should they fall victim of some risk. This is extremely important benefits which insurance brings. This not only to individuals, but also the whole country.Insurance stimulates business that makes the economy healthy. 

REDUCTION OF LOSSES: (Advisory roles)
Insurance also can help in actually reducing losses through the advisory role we play. Insurance companies have great deal of experience in risk of all kinds. Over time, we have found ways in which certain risk can be reduced, most especially Builders and Occupiers Liability insurance which are compulsory insurances. Surveyors are employed to inspect the premises and suggest likelihood of risk and suggest ways to reduce it. The advisory role insurance plays always reduces the likelihood some risk.

IMPROVED ECONOMIC ACTIVITY:
One further benefit derived from the transaction of Insurance, is the use to which the Insurance company puts the money it holds in the common pool.All the premium collected are held in a pool, until one of the members of the pool suffers a loss.This fund is invested in a wide range of investments, which all go towards aiding Government, Industry & Commerce in the country.
Some visible symbols of the uses to which Insurance funds are directed includes Building (Real Estate), Mass Transit Vehicle for transportation  among others.A whole lot of other busines

CREATION OF IMMEDIATE ESTATE
Insurance creates an immediate estate(valuables) in the event of death of the assured.Upon the death of an assured from whatever cause, a capital sum amount becomes payable to the named beneficiary of the assured.This therefore makes Life assurance very beneficial.This is important, if not compulsory for people with dependants who are minors(individuals under age 18).Breadwinners often think about their spouse, children and partner every day.There is the worry about what happens, if we are suddenly out of the picture? Who pays the bill,who keeps a roof over their heads, who helps the children to realize their dream?

TAX REBATE:
Life Insurance policy holders obtain tax relief as added advantage. This helps them in saving a large portion of their tax payment. When the tax-payment gets curtailed, then consequently, their disposable income increases, leading to more enjoyment out of a secured life.

INCOME PROTECTION:  Life Insurance is one of the best instruments for retirement planning. The money saved during the earning life span is utilized to provide a steady source of income during the retired phase of life. 

PROFITABLE LONG-TERM SAVINGS INVESTMENT:
 Since some policies can be used for a long term commitment; these policies help the policyholders meet the dual need of protection and long term wealth creation efficiently.

 SAVINGS CULTURE:
Life Insurance is a long-term contract where as policyholder, you have to pay a fixed amount at a defined period. This builds the habit of long-term savings. Regular savings over a long period ensures that a decent capital sum is built to meet financial needs at various life stages. 

MORTGAGE PROTECTION:
Insurance acts as an effective tool to cover mortgage loans taken by the policyholders so that, in case of any unforeseen event, the burden of repayment does not fall on the bereaved family. 

SECURITY:
 Life Insurance not only provides for financial support in the event of untimely death but also acts as a long term investment. You can meet your goals, be it your children's education, marriage, building your dream home or planning a relaxed retired life, according to your life stage and risk appetite.

 For free Consultation please call 08039286522 or email hillcrestpro@gmail.com

7 TIPS FOR FINANCIAL SECURITY IN RETIREMENT

1.  Pray for the best and plan for the worst.

Its great to look forward to the best in life but it wise to plan for the worst just in case things did not work out as hoped. A great part of premature death after retirement is because people's expections are not realised and they did not have a plan B.

2. Avoid falling victim to Parkinson's law  

Parkinson's law states that expenses will rise to meet income. Most people fall victim of this law. The best way to deal with this is to take up a savings policy every time there is an increment in your income.The increment is chanelled to this policy where they accummulate over time and are then invested wisely. By so doing, you maintain your expense level and increase your networth.

 

3. Set financial goals and take up a plan to achieve your goals.

Goal setting is important in achieving success. Financial goals include owning real estate, starting or buying a business, sending a child to college, retiring early with enough in your RSA account. All these can be achieve by determining a target amount to accomplish the financial goal and the time frame within which you intend to achieve the goal The target amount divided by the number of preferred period be it months,quaters, half year, or  annual will give you an idea of how much you must put away periodically to achieve your goal.

4. Start planning for your retirement early.

It is always wiser to start your retirement planning early. Two major reasons for this are firstly you will have a longer period of time to accumulate and grow your retirement nest and secondly the effect of compounding is usually greater in later years than in earlier years.This means that effectively you can save lesser amount of money than a person with a shorter span and still end up with more money in your retirement nest.

5. Savings , investment and insurance are essential.
These are the tripod on which financial security stands. Savings help you to accumulate, investment helps you to grow and insurance helps you to protect your investment and income and ensures your family are well catered for incase of the unexpected.

6. Develop an investment strategy to minimize your tax liability.
Taxation if not well managed can eat up a lange chunk of your retirement nest. Expert advise is needed on the types of savings and investment that will give the best tax breaks and benefits.

7.  Consult a financial advisor before you begin investing.
Its always wise to seek the help of a financial advisor to provide advice on the best investment and tax management strategies as well as recommended appropriate investment that will suit the peculiar circumstances of the client.

For free consultation please call 08039286522 or send email to info@hillcrestprofessionals.com