Building a safety net for your family using life insurance: Lessons from COVID-19
BRIDGETOWN, Barbados – The anxiety created by the experience of COVID-19 as it relates to the potential for financial hardship due to resulting economic stagnation and loss of income, has showcased the value of life insurance to an individual and their family during times of uncertainty. This from Sagicor’s Vice President – Barbados Sales, Gay Griffith.
“What this experience has taught many, is the importance of building a safety net for themselves and their families, as one significant event or change in circumstance has the potential to cripple a household”, he said. “Certainly, no one started 2020 expecting to suffer a reduction in income from working less hours or being laid off from work temporarily due to prolonged business closure; however, life is full of uncertainties which we should try our best to prepare for.”
Griffith stated that the purchase of a life insurance policy is one of the best ways to build this net, pointing specifically to the way in which the accumulated cash value element of the policy can be used by the policyholder in emergency situations.
“When an individual takes out a life insurance policy, over time this policy accumulates cash value that can be accessed via a loan. This gives the ability to borrow short-term from the policy for any number of reasons, such as paying for home renovations, financing education, or even debt consolidation”, explained Griffith. “In this case however, we are focused on those individuals who may have lost their jobs and therefore find themselves in a position where they cannot meet their financial obligations. Being able to access funds from their policy would allow them to ‘ride out’ the difficult period and when they get back on their feet, they can start the process of loan repayment.”
The Sagicor executive emphasised that this is even more critical for individuals who are the sole or primary breadwinner in the household. “If the primary breadwinner loses their job, becomes critically ill or dies, the policy will provide financial support to their family. The same can be said for business owners, where if the key individual dies, the policy would take care of the business’ outstanding debts, which would otherwise have become the responsibility of the family.”
The COVID-19 experience has underscored the valued of
life insurance, says Gay Griffith, Sagicor’s Vice President – Barbados Sales