Did your Financial Advisor discuss the Elimination Period? If not, read this article.
What is the Elimination Period?
Elimination period is a term used in insurance to refer to the time period between an injury and the receipt of benefit payments. In other words, it is the length of time between the beginning of an injury or illness and receiving benefit payments from an insurer. It is sometimes referred to as a 'waiting' or 'qualifying' period. Before benefits are paid, most insurance policies require a policyholder to qualify throughout the elimination period. 1/
Different life insurance companies in the Philippines have different policies concerning the elimination period. My advice is that you choose that life insurance company that provides the shortest elimination period for the accident, critical illness, and hospitalization riders.
The shorter is the elimination period, the better it is for you as a policy insured. It means that if knock on wood, you are tested to have critical illness days after buying your first life insurance, then, the life insurance company will honor your life insurance policy. They will pay your critical illness coverage.
Let met discuss the elimination period with Philam Life Insurance.
Life Insurance
If you recently bought your Philam Life Life Insurance, then you already have functioning protection as to your life insurance coverage. The face amount of your life insurance does not have an elimination period. You are already protected from the time that your life insurance policy is approved by the Philam Life Underwriter.
Accident Insurance
The same is the case for Accident coverage. There is no elimination period for accident insurance as regard Philam Life Insurance policies.
Critical Illness
The industry standard is that 60 days to 180 days elimination period.
I'm happy to state that for Philam Life Insurance, your elimination period is only 60 days. This means that if you, knock on wood, were diagnosed with a covered critical illness, say, for example, Kidney Problem, on the 61st day after you bought your life insurance, then, Philam Life will honor your Critical Illness coverage and will pay you with your critical illness coverage.
If however, you were diagnosed to have a Kidney Problem within 60 days after approval of your Philam Life insurance, then, you are still not covered with your critical illness rider. If however, you, unfortunately, died in the process, your beneficiaries are still entitled to receive your life insurance coverage since, upon purchase and approval of the insurance, you automatically have a life insurance coverage.
Hospitalization Benefit Coverage
The elimination period for hospitalization differs from different insurance companies in the Philippines. For Philam Life Insurance, it only takes 30 days. After which you now enjoy full protection as to your hospitalization benefit coverage.
Effect of Lapsation of your Life insurance Policy
If you failed to pay your life insurance policy, then you tried to revive the same within three years after its lapsation, then your life insurance in relation to critical illness and hospitalization will again have a new elimination period. Note: different life insurance companies differ in their policies about their respective policies.
CONCLUSION
What you should realize from my article is that owning life insurance does not automatically protect your life from all life's risks because technically speaking we have what we call ELIMINATION PERIOD. The elimination period is crucial as it may affect your ability to claim in your life insurance riders.
You should not let your guard down especially now that Covid-19 cases are rising to the roof What I suggest to you is that buy as early as possible your life insurance coverage so that you get past by the elimination period fast. Do not get life insurance when you already have an illness because it won't work. Financial Advisors function also like the company's underwriter and they practice some sort of methodologies in gauging whether you are qualified to own life insurance.
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Disclaimer
The Author is advising readers to consult with your respective Financial Advisors before venturing in any investments. Investing your money is dependent to your goals and your risk tolerance. You should know the risks and rewards of investing before you actually do the same. The illustrations above are for educational purposes only and any risks or losses that you may incur are imputable to your respective decisions.
The author does not in any way provide a guaranty as to the effectiveness and quality of the products and services that are featured in this blog. The products and services were advertised based on personal experience and product and service reviews that the product/service received.
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