November 24, 2018

Insurance is a key driver of economic development world over. Taking life insurance for any person, especially at a younger age is a great idea. Losses do not select and cut through the entire economy.

The need for insurance is agitated by the risks and losses that are likely to be incurred. Investors are not left behind as they are likely to incur huge losses in the occurrence of an unforeseen event.

Therefore, life insurance is a key component for any investor to consider and put it in his plans.

1. Long-term Investment Goals

Investors pump a lot of funds into a certain project with a view of future growth and the likelihood of making future profits. Sometimes the project’s break-even faster depending on their nature, others don’t lead to unforeseen losses.

The need for insurance comes in as it is a major instrument that keeps you safe for a longer time. It also plays a key tool for achieving the long-term goals set out by the investor.

Certain insurance products come up with varied investment opportunities. Some of these could generate income in terms of dividends based on their performance. Take for example the whole life insurance policy that guarantees death benefits. It shall be paid to the beneficiaries upon the death of the investor.

Therefore, paying a larger premium is an added advantage for an investor as the policy grows on a tax-sheltered basis.

The other famous insurance options that are linked to the investment is the investment-linked policy, more information concerning this type of policy can be found at

2. Saving Purposes

Some insurance policies require the investor to pay a large sum of the premium compared to the prevailing cost of the risk premium. The extra amount of premium paid is channeled to a saving fund for the investor.

The importance of this is that the investor can borrow that money at any time in the future. Insurance policies are exempted from taxes. Since investors would wish to maximize such an opportunity and save every coin.

The operations of life insurance take into effect the amount of time the premiums have been paid, it is prudent to take a policy when young so that it would be cheaper and relevant at an older age.

3. Charity Donations

Donating to a charitable institution is always on the mind of great investors.

Some individuals would like to donate a large sum of money today, Bearing in mind the time value of money one can think of investing in an arbitrage opportunity which is rare these days. Taking a life insurance policy then clicks into mind as a great idea.

The investor would then be paying premiums for the policy on behalf of the charitable organization and when the premiums cease to be paid, i.e. the investor dies, then the policy has matured. The benefit of this is that the money is valued at the fair market price, profits are easily realized.

The main problem with this type of a donation is that it is likely to lead into a legal case once the investor dies without notifying anyone, therefore, it is always great for the investor to write in his final will the requirements on how this should be done.

4. The Peace of Mind

Death is a random variable in that no one knows exactly the time of his demise. Any investor would like to leave a legacy. His business, family and other investment booming even when he has gone.

Investment opportunities are built on different platforms, including taxes and debt that need to be paid by the investor. It is always hectic for a family to be in a double crisis; the loss of a loved one and the misery of paying bad debts.

He knows well that in the event of death, such would be needed to be paid, therefore there is need to purchase a life insurance that would take care of these difficulties and enable his family lives in peace is a great idea.

This fund would likely cater to the funeral expenses, the education of his children, and the well being of the family.

We understand the capital outflow that comes with the arrangements of a burial. Therefore, setting up such a life policy plays a pivotal role.

Insurable interest is the art of obtaining a cover for any individual or property against an unforeseen event e.g. death. Investor insurable interest should be the driving motive in the long run so that in their absence life, businesses and investment goes on without any difficulties.

We have seen investors who enjoyed a great life. But at the moment of death, their empires came tumbling down before they were buried. Thanks to the life insurance companies for the continued advertisement on the need for the life insurance to the investors.

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