The Road to Achieving Brighter Life

While many people understand the concept of insurance, they may not always choose to or be able to implement it in their lives. Generally, people have an awareness of what insurance is and how it works. Despite understanding the concept, people might not always opt for insurance coverage.

There can be various barriers that prevent it from becoming a common practice for everyone. These barriers could be financial, psychological, or based on other personal factors. As a result, the gap between knowledge and practice can lead to individuals being exposed to financial risks that insurance could otherwise help mitigate, and eventually not being able to achieve financial freedom.

Financial freedom refers to a state in which an individual or household has achieved a level of financial stability and security that allows them to live their desired lifestyle without being excessively constrained by financial limitations. It means having the resources and means to cover essential needs, pursue goals, and enjoy life without constant worry about money. When you have achieved financial freedom, you are no longer limited in your decisions and actions by financial constraints. Instead, you have the ability to make choices that align with your values, goals, and aspirations.

Although insurance can play a role in achieving financial security and stability, it’s important to note that financial freedom is typically achieved through a combination of strategies, including saving, investing, budgeting, and making informed financial decisions. Insurance can help protect your finances from unexpected events, but it’s just one piece of the puzzle.

In the past months of attending SunTalks Digital Media Edition “Achieving Your Own Brighter Life” sessions, I have learned some steps to consider when using insurance as part of our overall financial strategy. First, you need to understand your needs. You need to assess your financial situation, needs, and goals. Then, create a budget that outlines your income, expenses, savings, and investment goals. This will help you track your progress toward financial freedom and make necessary adjustments.

While not insurance, having an emergency fund is essential. It’s a savings buffer that can help you cover unexpected expenses without having to rely solely on insurance claims. So before heavily investing in insurance products, ensure you have a sufficient emergency fund in place. This fund should cover several months’ worth of living expenses and act as a financial safety net. Just last week, I opened a new bank account to officially separate an emergency fund from my saving account.

In the past months, I started to regain my trust in insurance as I was reminded again and again that investing in health and life insurance is an important step in achieving financial security and protecting myself and my loved ones.

The timing for starting such investments, as we were told, can vary based on our individual circumstances and life stage. Life insurance premiums tend to be lower when we’re young and healthy. Starting early can lock in lower rates. However, the need for life insurance may change as we age and our financial obligations evolve. Upon entering the workforce, disability insurance becomes relevant as soon as we start working and rely on our income. This type of insurance provides income replacement if we’re unable to work due to a disability. It can help us maintain our financial commitments even when we can’t earn an income. Life insurance is also important if we have dependents who rely on our income. It provides financial support to our loved ones in case of our untimely death.

Meanwhile, having adequate health insurance can prevent medical expenses from derailing our financial progress. It can cover hospitalization, doctor visits, prescription medications, and preventive care. As soon as we start earning an income or become financially independent, we need to consider getting health insurance. Also, we need to get health insurance when we experience significant life changes such as marriage, having children, or changing jobs.

Lastly, achieving financial freedom involves more than just insurance. We should also focus on saving a portion of our income and investing wisely to build wealth over time. We also need to consider retirement accounts, investments, and other avenues that can help our money grow.

As of this writing, I reconnected to a life advisor and requested for several investment-linked life insurance policies as my options to consider for getting an insurance policy again. And just recently, I also invested to a food franchise business that can help me generate additional income to pay an insurance premium.

Remember that insurance is designed to provide financial protection and mitigate risk, but it’s not a guaranteed way to achieve financial freedom on its own. It’s a tool within a broader financial strategy that includes responsible money management, disciplined saving and investing, and informed decision-making.