In a survey conducted Sun Life Study of Lifestyles, Attitudes, and Relationships last 2017, it was reported that 71% of middle to upper-class Filipinos knew about insurance. The sad part though is that only 16% of them actually own a life insurance policy.
Why? It’s because most Filipinos still have a traditional mindset. They view insurance as a liability or an expense, rather than looking at it as an asset. This is the reason why insurance penetration remains low in our country.
But what really does life insurance does for you or your family? Today, we’re going to break down top facts about life insurance, and why you should get one while you’re young and healthy.
If you have a family that relies on your income to make meets end, then that’s the first reason why you should get life insurance. A life insurance policy is basically income protection that helps you and your family face significant financial uncertainties such as critical illness, disability, accident, or even death.
Just think of this, if anything happens to you right now, will your savings be enough to take care of your family and their future? If not, then you should think twice if you’re making the right financial decisions in your life.
So what is life insurance?
“Life insurance is a protection that successfully deals with the risk of death and offers the greatest financial security to your family. Life insurance will pay assured sum instantly on the sudden demise of the policyholder, which will be the greatest financial protection for the policy holder’s family.”
There are two main types of life insurance:
Term Life Insurance
Term Life Insurance offers cover at a fixed rate for a temporary period of time. If you pass away during the period of coverage, your beneficiaries will be paid out through a lump sum.
Whole Life Insurance
Whole Life Insurance, on the other hand, offers lifelong coverage and includes an investment component. This means that you’ll be able to receive a payout if the policy is canceled. If you pass away, your beneficiaries will receive the amount.
What factors can influence your Life Insurance Premium?
Life insurance cover is generally cheaper when you are younger and healthier.
If you’re overweight or have a pre-existing health condition, the insurance company might require you to pay a higher premium than the average person, due to your risk profile.
Smokers are likely to incur higher Life Insurance premiums than people who do not smoke. Most life insurance companies will, however, reduce your monthly premium if you stop smoking.
Life Insurance premiums are usually higher if your hobbies or lifestyle engage in high-risk activities, such as skydiving or extreme sports.
If you’re a firefighter, policeman, or seaman, you may pay a higher premium as some life insurance companies charge more if you have a high-risk job.
So what can life insurance do for you?
Life insurance offers financial protection to your dependents (spouse, children, parents, and loved ones). It can also be used to help pay a bond/rental costs, cover educational expenses, pays for funeral costs, and repay outstanding debt.
In short, life insurance is one of the keys to attaining financial freedom for you and your family.