Clean up Fund- Life insurance will be used as a fund to clear obligations to lessen the headaches of the dependents. These obligations include hospital bills, funeral, taxes, estate taxes, loans, mortgages. Don’t leave a burden to your family. Instead, leave good memory.
Re-adjustment Fund- cushions the family’s problems when the breadwinner dies. It will be used by the surviving spouse to raise up the small ones until she is enough to find a source of income. It can also be used to hire a helper, transfer residence.
Family Dependency Fund- Use the life insurance benefit to raise the children until they finish college. If you are surviving wife, you need it unless you want to work on a job while bringing the kids to school. If you are a surviving husband, you would have to raise the kids while balancing your work obligations.
Educational Fund- if you just put your money in the bank, chances are, you lose money because of inflation or you lose money because of the high rate of increase of tuition fees. But if you put it in investment instrument, there is a chance that you have your money work for you until the children reach college- just the time they need it.
Emergency Fund- putting your money in the bank brings you nearer to temptation to withdraw it. Putting it in investment fund gives you less temptation because you have to make more steps (like going to the office) to withdraw your fund.
Retirement Fund- there will come a time that you need money but your body can no longer work. The best way is to invest now so it can grow for your golden years.
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