A lot of people are scared after hearing the word insurance; they get scared of the money they get to use or that they do not need it. Insurance as per the Merriam-Webster dictionary is a “means of guaranteeing protection or safety.” Protection of your property, life, health, money, and many more.
Insurance is great for what-if situations we do not like to happen like “What if I get sick?,” “What if my luggage gets stolen?,” “What if my car gets broken?”, “What if I die early.” Or for preparing like when we get old or when the kids are going to school.
A lot may think they won’t need it as it is less likely to happen but we don’t really know what the future entails for us. So it is better safe than sorry. Insurance is an investment, not an expense. When bad things or accidents happen, the cost of insurance is sometimes less than 10% of the expense you may incur if you don’t have one.
We will be discussing the types of insurance policies in the Philippines and you can think which one would be most suitable to get’ if not all.
1. Life Insurance
In case the principal has died, a lumpsum amount will be given to the principal’s family.
2. Term Life insurance
You will get benefit in case the policyholder dies, if s/he doesn’t die in the period of coverage, you may have nothing back. The terms depends on you – what age you will purchase or for how many years. Moreover, after the death of the principal will also be investigated malay mo if parang drama at pinatay lang yung principal dahil malapit ng matapos ang insurance at para makakuha ng pera.
3. Whole Life Insurance
The insurance is good for the entire lifetime of the policyholder, however premiums should be paid, sometimes until the policyholder dies. When the policyholder dies, the death benefit will be given to the beneficiaries.
So for example, may insurance kinuha noon 30 years old si Person A if term life insurance kukunin niya for 30 years and namatay siya noong 65 years old, walang makukuhang death benefit. Pero if whole life insurance meron, kasi pang forever until mamatay.
4. Universal Life Insurance
In universal life insurance, not only will the policyholder have death benefits but also you can have savings. To make it simple, let’s say you need to pay 20,000 a year – a portion will be on your premium let’s say 15000 and the rest are invested; you will be paying for 30 years and until your death, the savings plus interest will cover you. So you won’t have to pay anymore like the whole life insurance but still get benefited.
5. Variable Life Insurance
Variable life insurance is a bit similar to universal, however, you could control where to invest. While the interest in Universal is stagnant, in the variable you could go higher but it’s a bit risky since you may get losses too.
Having life insurance is really good especially for breadwinners. Let’s say Person A pays 5,000 monthly for 30 years = Php 1,800,000 all in all. In case the policyholder dies, your beneficiary will have more than Php 1,800,000 that can cover Person A’s funeral expenses, house expenses, and children’s education even if the breadwinner isn’t there anymore.
Check out our article on Life Insurance Companies in the Philippines.
6. Health Insurance
Most people have PhilHealth, insurance under the Philippine government. However, it is sometimes not enough especially if you are many in the family or if you have a weak immune system.
If you are working, most employers would give you health insurance which they fully or partially pay. This is in case of emergencies like getting sick or injured at work, then you can get to spend money. Also, some include free medical check-up (laboratories, x-rays) to see whether you are still physically fit or if you have conditions that may affect you in the long run or is contagious (e.g. TB.) You can also have free tooth extractions and cleaning.
Health insurance can also let you cover your immediate family at an additional price so that you can also pay less on their check-ups or incase they get hospitalized.
For example, Person B has health insurance of Php 5,000 a year. He needs to get his tooth extracted and the regular cost is Php 1,000 but free with medical insurance. He gets hospitalized for 10 days and the room fee is Php 500.00 a day but free according to his policy. So the expenses without insurance are Php 6,000 but since he paid Php 5,000 he saved Php 1,000.00 and much more if we include doctor’s fees and laboratories. So health insurance is definitely great insurance to have.
7. Educational Insurance
Tuition fees are increasing and we are not sure if we could afford to let our kids go to prestigious schools or universities, so we might as well invest in their future. Educational Insurance lets you save money in advance and you can cash-outs for tuition payments or school allowance and education benefits.
You could save for 10 years for your child’s brighter future. If you pay Php 20,000 monthly for 10 years then you could have Php 2.4M, not including of interests, so if tuition fee is Php 100,000 in the future, you could definitely be ready – it could include allowance, housing, uniforms and for projects. It’s a great investment for your kid’s future.
10. Vehicle and Accident Insurance
If you have a car or a motorcycle, then you need to have this insurance. In case your car gets damaged or you or your family members riding the vehicle gets in an accident. The cost will depend on your car’s cost and how many persons are in the vehicle. There might be deductibles too.
For example, you pay Php 10,000 for your car insurance and Driver X, a newbie driver, hit it to a tree resulting in damaged headlights and bumper. Your policy states you have a deductible of Php 2,000 and the repairs will cost you Php 25,000.00. You need to pay only Php 2,000 to repair shop and the rest is by the insurance company. So you have saved a total amount of Php 13,000.00. O diba, sulit. Pero wag mong ibangga para makakuha ka lang ng insurance, malulugi ka if you do it on purpose, wala kang sasakyan gagamitin nyan. In case of emergencies lang to.
In case of accidents, you can get back the maximum amount insured vs your expenses. For example a maximum of 100,000 per person then Person D was riding the car when an accident causing him a loss and hospital bills of Php 50,000, then you can claim it from the brokers.
11. Compulsory Third Party Liability
If you have a vehicle, a CTPL is a compulsory requirement when renewing the license of the vehicle. For renewal, you need Emission tests, MVIS, CTPL, and payment. So if walang insurance, wala kang bagong OR. Lagot ka pag-may PNP check.
A Third Party Liability basically helps you in case you hit someone by accident or a passenger who is a friend or co-worker of the driver got injured, then you can get claims for their expenses.
As an example: Person G has paid Php 500.00 for his CTPL, then he accidentally hit Pedestrian L. Pedestrian L had Php 20,000 hospital bills, bought Php 5,000 worth of medicines and wasn’t able to work for 5 days losing Php 2,500. He can ask reimbursement from Person G. Person G can submit the documents to the broker so that he could be reimbursed of what he has given to Pedestrian L. With CTPL Person G saved Php 27,000 (27,500 total expense – 500 CTPL.)
12. Property Insurance
The most common insurance for homeowners is property insurance in case of accidents like fire, theft, earthquake, floods and many more. If your area is prone to fire or flood, then it is better if you own this so that if such happens, you don’t start from scratch. It covers the house and what is inside. You’ll have money to repair your house and buy new equipment.
13. Travel Insurance
Off to travel? Ride a plane or a boat or go to another country? Well, you need to have travel insurance that covers you in case you will lose your baggage, you’ll have delays or you get into an accident. I recently encountered a car accident in Pakistan, and I was glad that I have Safetywing Insurance by my side that covered all my medical expenses.
It’s better safe than sorry, so you need to have an insurance ready in case something you do not like or did not expect happens. It is better to slowly invest money on insurance than do it one big time in an emergency, minsan nangungutang nga tayo pambayad lang. So don’t be afraid to get insurance in the Philippines.
What are the ones you are paying for? Which insurance do you think is best for you? We like to hear your thoughts!