My mentor in finance is mom. When I was a little girl, the first thing she taught me is to save. When she hands me my weekly allowance, she would remind me to set aside some of it at the end of the week. She would tell me that it’s very important to save for the rainy days. Life’s unpredictable and full of surprises (which includes emergencies) – you’ll never know what’s in store for you until it happens. In line with this first lesson came the second one which is to buy insurance.
Mom has always been a fan of insurance. She would always tell me how amazing insurance is, in that it’s the only financial product in the world that can give a person large lump sum cash for life’s major risks like death and accident in exchange of money that is way too small than the benefit. To give you a brief background, during her time, the common coverage is for death and accident only. Critical illness coverage, as you may have heard, just came later on. Going back, I don’t understand then why a person would need instant cash as big as that when you have your savings anyway, until she started relating to me her conversations with her Sun Life advisor.
During their first meet up, her advisor asked, “Why do you want to buy insurance?” My mom replied, “I love my daughter so much that I don’t want to be a burden nor give her a worry. My family has a strong history of illnesses. When I fall into sickness and eventually die, I want her to be able to pay off any bills and debts that I may leave but most importantly, I want her to continue living. I don’t want her to become a pauper. I want her to have the money to support her in her daily life, especially so she can go to good schools, graduate and land herself a decent job.”
This idea of insurance as a product of love struck me so much that I myself decided to purchase insurance. In the same manner as my mom doesn’t want to be a burden, I don’t want to be a burden too. I know that it is parents’ obligation to look after children’s expenses when they are still incapable of taking responsibility, but still, I love her so much that I want to leave her a gift. While no amount of gift can lessen the grief over my possible loss, at least she won’t have to worry where to get the money for costs of my death.
Also, I have always wanted to start early in everything. I want to be ahead. I thought that getting insurance early is advantageous because premiums are still low. More than that, I know that when I am old, I will have many responsibilities which include providing and taking good care of my family. One of these responsibilities is ensuring the readiness of cash for the unexpected and insurance does the trick. I know I will need a certain amount of coverage depending on my family’s circumstances and it will be perfect if I can reduce the required somehow at this early.
At the young age of 16, I called up my mom’s advisor and told her I want to get insurance. To her disbelief, she said that in the meantime, she will get back to me. What I did not know was she called up my mom to reiterate what just happened. My mom was so shocked that in turn, she called me to verify. She asked me my source of funds and I bravely told her, “I’m selling yema and chocolates remember? It will be from the proceeds of that.”
And that was the start of a financially wiser me.
Contributed by Clarissa Ramos