Is Your Daily Household Expense Protected?

Getting the amount of daily household expense requires a bit of calculation. People usually give me their average monthly living expenses. I’m sure that’s the same for you, too. You can give your monthly budget in a snap especially if you are living on single income.

That means your family lives on one income alone. The sole earner provides for all the needs of your household. You know when and how much money comes day in and day out. Your family’s daily needs are secured as long as the breadwinner is strong, healthy and earning.

But there are inherent risks. What if something happens to the sole earner? We do not want that to happen but life is full of uncertainties. If you are that breadwinner, will your family live the life they are used to when you are gone?

Protecting Your Daily Household Expense

We can say that your daily expense comes from your monthly or weekly budget. Your day to day expense takes care of your basic necessities and lifestyle. It is your cost or standard of living. In worst-case scenario, your family’s standard of living will lower if you do not have enough protection.

Or what we call insurance. Why is it important? Not enough insurance will burden your family whether you like it or not when the time comes. And most of the time the unthinkable happens at the wrong time, not when you want it.

How would you know if you were adequately insured? Let’s say your average household expense is 50,000 pesos monthly. You divide that by 30 and you get your daily expense. You multiply that by 12 and you have your yearly expenses of 600,000.

Your insurance should be equal to the amount that would give 600,000 to your family every year. An investment instrument with a yield of 10% shows you need P6 million insurance. This means your family will only get the yearly yield, enough to cover the expenses.

This amount will allow your family to maintain their current level of lifestyle. And if your insurance is only for expenses, it may not be enough. You also have to consider hospital bills and funeral expenses - not just for the daily household expense. Click here to find out which type of life insurance policy is right for you.

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