Tuesday, October 5, 2010
2. A Form Of Savings.
Don't groan when you pay a life-insurance
premium. It is not expense and you are not
paying something for nothing. You are sav-
ing money and insurance is taking care of it - Benjamin David King
In the distant past, the obvious way to save money was to secure it in a biscuit tin under one's bed. Today, it is more sensible to place it in the bank. But there is another equally safe and attractive alternative - life insurance.
By setting aside the same amount of money in life insurance, a prudent saver is guaranteed of reaching his savings goal! How does that happen? Let's take an example, a man who is able to save $10,000 every year.
How long does it take him to accumulate $1,000,000 (a million)? Right - 100 years - which is practically an impossibility. But through life insurance savings, should death or disability occur, he could be assured of $1,000,000.
Many people consider life insurance a more superior form of savings for these reasons:
(a) It is regular - occasional savings or saving just when you feel like it does not guarantee accumulation;
(b) It is enforced - you are committed to save a fixed amount every year, at the same time each year;
(c) It is yours yet not easily accessible - this removes any temptation to withdraw and use it, thus defeating your original purpose of savings!
Sometimes, people are confused in their use of the word ''saving''. For example, I frequently hear people say ''Í am saving to go for a holiday in December''. That's a misnomer. They are truly not saving but involved in a deferred expenditure! Instead of spending the money now, they will spend it all in December. A more accurate description is ''cash in transit''. There's nothing left in the kitty come January 1st.
Saving is a must. Without setting something aside from one's regular income, there is nothing to show for the passage of time. ''Pay yourself first'' makes sense.
As the expression goes: ''Either save to buy life insurance; or buy life insurance to save.
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