Someone said that in this journey, it is either we live too long or die too soon. If we live too long, we need to invest now so that our investments will suffice our lifetime bills and expenses. And if we die too soon, we need life insurance to cover the related expenses too. You see, whatever may happen to us, we need to prepare for it.
The best decision I made before I turned my 30s was to have my life insurance. At first, I was hesitant because it’s an additional responsibility when it comes to my monthly obligations. But I changed my mindset and consider it as financial security I invested which my future self will be thankful for.
So, allow me to share a personal takeaway when it comes to life insurance. In this article, I will be talking about five questions you could ask yourself and have them answered before you dive into applying for life insurance in the Philippines.
1. WHAT IS LIFE INSURANCE
According to Investopedia, life insurance is a contract between an insurer and a policyholder. It is a legally binding contract.
1. Term Life – insurance that lasts a specific number of years like 10, 20, or 30 years.
2. Level Term – a type of insurance where premiums are the same every year.
3. Increasing Term – where premiums are lower when you’re younger and increase as you get older.
4. Permanent – a type of insurance where it stays in force for the insured’s entire life unless the policyholder surrenders the policy.
5. Single Premium – where the policyholder pays the entire premium or one-time payment instead of monthly/quarterly/annual.
6. Whole Life – a type of permanent life insurance that accumulates cash value.
7. Universal Life – a type of permanent life insurance with a cash value component that earns interest.
8. Guaranteed Universal – a type of universal life insurance that does not build cash value and has lower premiums.
9. Variable Universal – where the policyholder can invest the policy’s cash value.
10. Indexed Universal – a type of universal life insurance that lets the policyholder earn a fixed or equity-indexed rate of return.
11. Burial or Final Expense – a type of permanent life insurance that has a small death benefit.
12. Guaranteed Issue – a type of permanent life insurance available to people with medical issues who will not pay a death benefit during the first two years the policy is in force.
It is advisable that you need to have a better understanding of what life insurance is before having one. Somehow as I get to know the deeper meaning of it, the motivation to pay comes neutral. It’s like setting a good mindset toward the concept of life insurance.
2. WHERE TO APPLY FOR AN INSURANCE
Have you asked yourself what insurance provider is the best? Have you done the research and compared their features or benefits?
That’s totally good!
Your insurance provider or the company itself must have been doing well in the insurance industry. Better to check some facts about them.
Not to boast, but I’m so proud of the insurance provider I have.
According to an article published by Grit PH dated April 29, 2022, the following are the top 10 best life insurance in the Philippines.
1. Pru Life Insurance Corp. of U.K.
2. Sun Life of Canada (Philippines)
3. Philippine AXA Life Insurance, Corp.
4. FWD Life Insurance Corporation
5. AIA Philippines American Life and General Ins. Co., Inc.
6. Manulife Philippines
7. BDO Life Assce. Co., lnc. (Generali Pilipinas Life)
8. Allianz PNB Life Insurance, Inc.
9. BPI-AIA Life Assurance Corporation
10. United Coconut Planters Life Assurance Corporation
As you get to know what life insurance is and its importance, better to have an understanding too as to the insurance provider you’ll be going to choose.
3. WHY DO YOU HAVE TO GET LIFE INSURANCE
I once asked myself, “Why should I have life insurance?”. And I answered my own question, “For my beloved family”.
Personally, the finance topic is very close to my heart and I’m actually advocating such a thing. Why? Because I would like to stop the wrong mindset of preparing ahead or as early as now in your retirement years, especially with regards to finances. I just see the hard part of it from my parents and wouldn’t like it to happen the same among us siblings.
I’m not blaming or disappointing what had happened to my parents, I’m encouraging young adults if there’s a chance to have a better life tomorrow then take action today. If you can prepare ahead for your future financial status then why not. Thus, my deepest why to get life insurance is my family.
According to Sunlife, benefits or reasons for having life insurance are the following:
1. Income Protection – if something happens to the breadwinner, life insurance will serve as a means to provide income to the people left.
2. Peace of Mind – people who matter to you will be financially protected as long as they’re policy’s beneficiaries.
3. Money Protection – the money we worked for should be protected from getting lost.
4. Health is Wealth – life insurance helps cover hospitalization costs and also accident or disability benefits.
“Life insurance is an important part of self-care that can help you prevent getting in serious financial trouble in the future.” – a quote from Sunlife article.
4. HOW TO AVAIL OF LIFE INSURANCE
So now that you know what life insurance is, why you need to have one, and you have chosen an insurance provider too, it is time to know the process of getting life insurance in the Philippines.
As far as I remembered during the application process for my life insurance, I was casually interviewed by a financial advisor. Questions like do you start saving or investing at your age, what financial preparation you did so far as an act of being responsible in handling your hard-earned money, and the like.
And when I said yes to life insurance investment, I was able to fill up some documents and provide the necessary references for my identity. Then the process moved to approval and then eventually to the initial premium payment.
To summarize the above personal experience as to how I got my life insurance, the below steps will help you to understand the flow of your insurance application.
Step 1: Get a quote – request a quote online or over the phone by just telling a little bit about yourself.
Step 2: Speak with an Agent – questions about medical history to provide a specific plan for you.
Step 3: Complete an Application – providing needed information to approve the coverage.
Step 4: Take a Medical Exam – if necessary, this will determine your eligibility to finalize the coverage.
Step 5: Underwriting begins – the process in which the provider reviews the application and assesses your insurance risk, and this may take a few weeks.
For some reason, some applications are not approved but this doesn’t mean you could no longer have life insurance by the next time you apply. The best thing to do is to consult a financial advisor or expert for you to understand what to do next or a brighter way approach.
5. WHO IS YOUR FINANCIAL ADVISOR
Choosing a financial advisor was my top consideration when I decided to get a life insurance policy.
My simple reason was to connect with that person who will help beyond money. What I’m saying is that someone who has sympathy for the client’s financial status and is willing to impart relevant financial literacy. The financial journey to a lifetime financial advisor.
And I’m blessed to have one. Let me share some facts about my financial advisor which convinced me to choose her over other financial advisors. Maybe you could consider the facts as you choose your financial advisor.
I called it the 3 C’s describing my financial advisor.
1. Compassion to help – she does beyond what she gets, and really provides you helpful information to establish your future investment which is to prepare for your retirement years and any other financial concerns.
2. Consistency to reach – she never gives up on you when she sees the need for you to start the journey, after she presented to me about life insurance I never say yes immediately and it took months for me to finally decide, and she consistently made a follow-up.
3. Competitive – she continues to excel so that clients will find her as an authority, and this validates her excellent service.
According to Money Crashers, there are 7 things to consider when choosing a financial advisor. Let’s take a look.
1. Someone who understands your own financial needs.
2. Someone whose qualifications are excellent and authentic.
3. Someone who is an expert in financial matters, a certified/licensed financial planner is really an advantage.
4. Someone who is well-experienced.
5. Someone who will be compatible with your preference.
6. Someone can be truly trusted.
7. Someone who is transparent and keeps records.
If you decide to get life insurance in the Philippines, the following are relevant questions you must ask yourself to come up with a brighter decision.
1. What is Life Insurance?
2. Where to apply for Life Insurance?
3. Why do you have to get Life Insurance?
4. How to avail of Life Insurance in the Philippines?
5. Who is your Financial Advisor?
At the end of the day, you will be responsible and accountable for the choice you’ll make.
Educate yourself. Learn basic financial planning.
Now, make a wise and bright choice!
Please let me know your thoughts about this article.
Feel free to leave a comment.
Thank you and God bless you.