With the rise of available life insurance in the Philippines from different companies, it is getting more and more difficult to choose which one is right for you. Oftentimes, the pressure that society gives which forces you to get one becomes our sole reason why we buy.
Given this, how would we know how to choose? Or do we even need one?
Let’s take a look at some factors that you need to consider before signing up for one.
It is important to remember that life insurance policies are greatly age-dependent. This means that the younger you are when you buy the policy, the lower your premium will be.
The simple explanation for this is that the younger you are, the more years you have left to pay for your premium. The older you get, the more expensive your premium will be.
Experts’ Tip: The best time to buy insurance is when you are in your 20’s to 30’s.
While age is a great factor in deciding to buy insurance, you have to note that when buying insurance, you are not buying for yourself. You are securing your family members.
Having insurance guarantees that your family and children will still have money even when you leave this world. Hence, the name insurance. You are insuring your family’s future.
Experts’ Tip: If you just graduated and you have no dependents yet, it is best to invest your money first.
Of course, you need to make sure you can pay your insurance. A lot of Filipinos make the mistake of buying insurance only to have all of their paycheck go to it.
While some may argue that the peace of mind it brings is worth it, problems may arise especially during emergencies.
Experts’ Tip: Before buying insurance, secure an emergency fund that you can pool money into and take out from in case of emergency.
Another factor to consider is your health status. Do you live a healthy lifestyle? If not, no matter how morbid it is, you can’t take away the fact that you can be susceptible to diseases.
Also think about your family’s health problems, do you have a history of illnesses that you should be worried about?
Experts’ Tip: If you have a family history of illness, then saving up for an emergency fund and eventually buying insurance should be your priority.
Other life insurance factors
The factors that were discussed above depend from person to person. Your answers may not necessarily be the same as your friends or even your siblings. The best way to go through this decision is to talk about it with your significant other. After all, your family is who you are insuring.
Here are other factors that you can ask your financial advisors:
- Automatic payments – It is more convenient to have your premium payments automatically deducted from your bank rather than having to pay for it yourself monthly.
- Immediate payout – Some insurance policies have a fine print that says the money can be claimed 2-3 years after death. Look for a policy that can help your family immediately.
- Living benefits – Some insurance policies become worthless when you suddenly become ill because you won’t be able to claim the money you paid. Look for a policy that will allow you to stop the policy and claim your money if you suddenly get an illness even if you haven’t paid for the full term yet.
- Conversion feature – Needless to say, insurance companies approve people who are young and healthy. What if you are 18 years into a policy but you still want to continue your coverage? Having a conversion feature lets you continue your coverage without having to hunt for a new policy that might not approve you because of your age or health status.
- Fine prints and easy policies – Sometimes, companies will roll out packages and promos that will allow you to get approved even without medical exams or other requirements. While this is good, they can have fine prints that are easily neglected.
There you go. Hunting for life insurance policies in the Philippines is never easy. It is easy to find an advisor but never easy to decide what is best for you.
For the final tip, just remember to not be swayed with the society’s demands. The decision to buy rests solely on you and your partner. Do not let promos and peer pressure dictate your decisions.
Sit down and figure out your needs, and then decide which one to buy.