Barbadian Activist Kammie Holder’s “Swimming Upstream”: Insurance Explained

Kammie Holder LUTCF, FSS sharing his 25 years of experience in the insurance industry. Currently recruiting persons for Life, Pensions, Funeral, Term insurance on behalf of Guardian Life of the Caribbean. I can be reached directly at 246-228-6396

Barbadians for most part use life insurance to protect their family by providing a lump sum to pay off any loans or mortgage repayments, as replacement of family income in the untimely death of the major breadwinner and is also often used to help cover funeral expenses.

Life insurance is of two major classes, term insurance and investment type policies. Term policies are the simplest and generally the cheapest form of cover and will provide protection for a set period, after which the policy terminates and is mainly used to cover mortgages. Investment type policies such as whole life insurance provide cover for as long as the policy holder lives, as well as the building up of an investment value or cash value which can be cashed or drawn down.

Some Barbadians resist thinking about life insurance or shy away from discussing its benefits. In addition some are misguided into thinking that an employer sponsored group Insurance, is owned by them and can provide the 10 years time salaries required to replace family income in the event of their untimely death. Neither, can an employer group insurance plan be used to cover a mortgage; neither does it build cash value which can be drawn down by the insured. We would all like to believe that we are going to live forever, however there comes a point when reality needs to step in and plans must be made for the inevitable.

Would you want in the event of your untimely death that your family becomes a ward of the state or that the family home will be lost, however it can also be used to cover the costs of a paying for the tasks a house person performs on a daily basis in the home, such as child care and housework. Businesses also commonly take out life insurance policies on their key employees such as the Chief Executive Officers to protect against any financial losses to the company that could be incurred due to their untimely death.

Some may ask why I need life insurance if I don’t have a family. If you need a mortgage the financial institution will need you to have life insurance in an amount of the money loaned to you. When last have you seen an individual with one leg hopping in the street? There is an insurance rider called Accidental Death and Dismemberment which compensates you on the loss of any limbs. Medical insurance would pay the surgeon to amputate the limb in the event of disease such as gangrene. The ADD life insurance rider would pay you a lump sum equivalent to 50% of the benefit coverage. Thus a person insured with ADD for $100,000 would be compensated $50,000 for the loss of a leg or limb.

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Insurance is known as the miracle of pen and ink,it creates dollars via the purchase of a policy with the strike of pen on paper; it’s an absolute necessity in life today, and everyone should have life insurance, either as an investment or saving measure, or as a prudent way to provide for your family after you are gone. Whatever the motivations for agreeing to a life insurance policy, one has to make sure that he gets the right one for himself, by knowing about all the various types of life insurance that are available. However, I must caution you that many persons always say that they will buy life insurance when they are ready. Let me therefore inject caution in bold, LIFE INSURANCE IS PAID FOR BY A PREMIUM, LIFE INSURANCE CAN ONLY BOUGHT WITH GOOD HEALTH!

Finally, the most common use of life insurance is to provide a sum of money for those left behind on the untimely death of the insured. But life insurance can also be used as a source of retirement income. The cash component—commonly referred to as a cash value, is a build-up of cash within the contract. It’s this cash component that makes these life insurance policies a potential source of retirement income.Even though you may already have retirement savings, life insurance can be a valuable source of additional income in retirement. Accessing a life insurance policy’s cash value for this purpose offers certain benefits. It can help you guard against the possibility of outliving your retirement savings by providing you with additional retirement income, and give you the ability to help pay certain expenses, such as health care-related costs, which tend to increase as you age.

Should you die too soon will you be leaving your family a legacy of financial hardship or pleasant memories. Over 3400 persons die in Barbados yearly, what provision have you made in the event your number is pulled. Do the right thing today!

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