Insurance policies

Growth and jobs | Insurance policies can be a good long-term savings strategy – Blagrove | New

INSURANCE POLICIES that include an investment component are good for building resilience and are ideal as a long-term savings strategy for retirement.

That’s according to Othneil Blagrove, senior sales manager at JN Life Insurance Company. “One of the purposes of the investment component of an insurance policy is to build financial resilience and is ideal long-term savings for retirement income. Therefore, people should not hesitate when it comes to purchasing insurance with an investment option,” he said.

Blagrove explained that life insurance is designed to provide financial guarantees against the death of the insured, but it can also work as a good investment plan, which helps people achieve multiple life goals.

“Investing in a good life insurance plan can ensure you have additional retirement income when you are no longer able to work. Also, it can serve as a rainy day fund for things like school fees, emergencies and other needs that may arise,” he said.

However, the insurance manager warned that it shouldn’t be the only investment option in your portfolio.

“While we in the financial industry encourage people to take policies with investments, we also advise them to consider other forms of investment, as life insurance was supposed to be used primarily for medical emergencies. or in the event of death. Therefore, it should be part of your investment portfolio and not your only investment,” he stressed.

Blagrove explained that over the years, several policyholders have used their policies to accumulate funds to invest in the stock market or other schemes. However, he points out that, whatever the reason, the funds represent a solid investment strategy.

He said that despite their multiple uses, policy investments should not be cashed in except in an emergency.

“Funds accumulated on a life insurance policy are usually allocated for specific purposes, based on one’s financial goals throughout their life cycle. Ultimately, it provides retirement income, so a policyholder should seek to preserve it as much as possible. If they find themselves in a difficult financial situation, one suggestion would be to use it as collateral for a short-term loan. But using it prematurely should only happen when there is no other option,” he said.

Blagrove recommended that a policyholder speak with a financial adviser before withdrawing money from their policy, to ensure they are availing themselves of the best option.

“The policyholder should contact their insurance advisor, who can inform them of the procedure to follow, as the policies have different characteristics. People can ask if they can repay what was taken when their financial situation changes. Thus, a needs assessment is always advised before making a decision,” he explained.

He also explained that insurance policies provide benefits when allowed to grow, especially over the long term.

“In general, the longer you let the cash value of the policy grow, the better it is. When you take out a policy, it is ideal to wait between five and 15 years before drawing funds from that policy. Plus, if you have a term life insurance policy with an investment option of up to 30 years, you can still cash out the funds after that time or transfer them to another policy for even higher returns. People may be skeptical of this view because it feels like only the insurance company will benefit. But the benefits of waiting and weathering this storm will be rewarding,” he advised.

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