What You Need to Know Before Buying Life Insurance in the Philippines | EfPrime Financials
Last 2 August 2020, President Duterte addressed the nation and stated that he will grant the plead of the medical front liners to put Metro Manila and the neighboring cities back into Modified Enhanced Community Quarantine. We also heard the President that the government will provide additional benefits for our medical frontliners. One of the benefits mentioned is to provide our medical frontliners with Life Insurance.
In this regard, let me discuss the things that you should know about life insurance and realize its importance to all of us.
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| Photo Credits: Canva.com |
The things that you should know are as follows:
- Financial Capacity
- Cost of Insurance
- Types of Insurance
- Coverages
- Value for Money
- Financial Advisor
- Insurance Company
- Payment
- Claims
Let me define what is Life Insurance first:
It is a protection plan that aims to protect the life of the insured. If in case the insured died or has suffered from the covered life risks, then his/her family will get the face amount of his/her life insurance.
This means that life insurance replaces the income that the family provider brings in for the family. Hence, the family's lifestyle will not be drastically affected by the physical absence of the insured because of his untimely death. Please note that life insurance is not all about the death of the insured it also covers all life's risks such as accidents, the possibility of having a critical illness, and the cost of hospitalization.
Why now that our medical frontliners demanded that they are given life insurance? They know that being since they are at the battle line against an invisible enemy, there is a chance that it can impact their health and it can negatively impact their family's lives. At the end of the day, a frontline has a family to go home to. A family to feed.
Life insurance is not only for medical frontliners, it is also for you. A plain and simple human being who is working so hard to provide the needs and wants of your loving family.
Now let me elaborate on the following important characteristics of insurance, making it an integral part of our medical frontliner's remuneration
Financial Capacity
Through the years, life insurance has evolved from a plain protection plan to becoming a financial plan that promotes better health, that encourages longer lives and that helps families succeed in their respective personal financial life.
As a result of the evolution of life insurance, there are now many life insurance products in the market that caters to your current financial capacity. Further, there is also a protection plan as you change your life status, for example from single to married. the good thing about it is that, you are in control of what should be included in your life insurance financial plan.
Cost of Insurance
One of the core principles of insurance is that the younger you are, the cheaper is the cost of the insurance. Further, as you add more protection to your financial plan, the higher is the price of the insurance.
Just a piece of advice, if you are earning already, try to acquire your financial plan to capitalize on the cheaper cost of life insurance. Read here the five tips to save money in life insurance premiums.
Types of Insurance
There are many types of life insurance in the country. The following are the types of life insurance:
- Term insurance
- Term insurance is a type of life insurance policy that provides coverage for a certain period of time or a specified "term" of years. If the insured dies during the time period specified in the policy and the policy are active, or in force, a death benefit will be paid. 1/
- This is the cheapest among the three life insurance and is best for individuals who are saving in life insurance premiums.
- Permanent insurance
- The two primary types of permanent life insurance are whole life and universal life. Whole life insurance offers coverage for the full lifetime of the insured, and its savings can grow at a guaranteed rate. 2/
- Universal Life Insurance or Variable Unit-Linked Insurance (VUL)
- This life insurance is a product that has investment and protection combined in one. I define this as a product that maximizes the hard-earned income of an individual since his/her money is working to generate for him an income that can be used in the future while at the same time, addressing all the risks that might endanger the coffers of the family such as cost of dealing with untimely death, cost of curing accidents, cost of curing critical illnesses, cost of hospitalization and even retiring without money at all.
Coverages
By owning life insurance, you are protecting your family. This is because, if unfortunately, that death happens to the person of the insured, his/her family's lifestyle will remain the same if not improved because of the life insurance that you bought for them. The face amount of the life insurance that you bought will be given to your beneficiaries, tax-free. It shall replace the income that you bring to the family's table. This means, your kids will go to college. Your wife will not look for another man or men for support.
The question now is, how much should be your life insurance coverage?
Your life insurance coverage should be at least 10 times your income. This will make sure that your family will live for the next 10 years after your untimely demise.
Value for Money
Life insurance should be the first on your list when it comes to investing your hard-earned cash. This is the most neglected investment that a usual person does.
Life insurance does not only protect the insured from untimely death but also it also provides a mantle of protection for the family from unwanted expenses caused by accidents, expenses for critical illness treatment and expenses for treatment for hospitalization.
Why should you invest first in life insurance? The reason is simply that life is unpredictable. No one can never tell what happens tomorrow. One day you are healthy and the next you encounter an accident or suffer cancer. Life gives you headaches when you least expect it.
In relation to today's pandemic, suffering from the disease caused by Covid-19 will not only affect the health of the insured family provider, but it will also affect the working budget of the family. As the saying goes "Ang sakit ng kalingkingan, ay ramdam ng buong katawan." You are the kalingkingan, your family is your katawan.
The ideal financial planning in this time of pandemic is to have a protection policy for you self. At the end of the day, whatever might happen in your being is an issue of the whole family.
Furthermore, gone are the days that life insurance is solely for the protection of the insured i.e. that the insured can only use his/her life insurance if something happens to him i.e. death, accident, hospitalization, and suffering from critical illness. The insured can actually enjoy living benefits from his/her life insurance. There are many rewards, cash rewards, and discounts with partner companies such as the Philam Vitality technology.
Financial Advisor
The best thing about buying life insurance is that you can buy them from Financial Advisors. You need not buy them inside the banks. You can buy them in the comfort of your homes. Buying life insurance now is never hard, especially for our frontliners.
The advantage of buying life insurance from a Financial Advisor is that it is personalized service as compared when you buy life insurance from a banker.
Insurance Company
If you are considering buying life insurance, then consider buying from the market leader in the Philippines, Philam Life Insurance. Philam Life is the number one life insurance in terms of total assets owned and total net worth as of December 2019. Read my full article.
How to buy it?
Buying Philam Life insurance has never been this easy. You can buy it in three different steps. No need for physical meetings. You can buy it from the comfort of your homes.
CONCLUSION
I hope that you understand why the medical frontliners requested for life insurance coverage for their families from President Duterte. They acknowledged that having acquired the disease in their work might bring hell to the lives of their families.
Don't be despair if you think you can't afford life insurance. As I mentioned, there is life insurance that fits your financial capacity. You need not be in despair.
Modern and correct financial planning, includes life insurance in their financial plan, as this has a great impact on the financial lives of families in the years to come.
Book my services as Financial Advisor.
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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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