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  • Writer's pictureSheneri

5 Questions Answered that You Need To Know About Life Insurance


your life insurance is one of your financial security

“Will you look back on life and say I wish I had or I’m glad I did?” – Zig Ziglar

This quote from Zig Ziglar (American author and motivational speaker) speaks to me personally because these words are real and alive. Three (3) years ago, I told myself I wish I had life insurance earlier. But it didn’t stop me from getting one which now I can say I’m glad I did.


Before I turned in my 30s, I had my life insurance. At first, I was hesitant because it was an expense, and the fact that I had a lot of questions. However, I changed my mindset and looked at it as an investment. Then, slowly those queries in my mind were answered.



So, allow me to share five (5) questions about life insurance that you might be keeping in your mind. We'll answer them one by one along with my personal experience.



Dive in now!





5 QUESTIONS (Q) ABOUT LIFE INSURANCE


Q1: What is Life Insurance?



Investopedia says 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 have a better understanding of life insurance before considering getting one. Personally speaking, as I get to know about life insurance, the motivation to pay comes neutral. It’s like setting a good mindset of why you're paying the insurance premium.




Q2: Where to apply for Life Insurance in the Philippines?



Have you asked yourself what insurance provider is the best? Have you done the research and compared their features or benefits?


That’s good!



Your insurance provider or company must have been doing well in the insurance industry. Better to check some facts about them.



Not to boast, I’m so proud of the insurance provider I have.



According to Moneymax in their article about personal finance published on March 2, 2021, the following are the best life insurance companies in the Philippines which are based on Insurance Commission’s official website.



Life Insurance Providers with Highest Premium Income

life insurance providers with highest premium


Best Life Insurance Companies Based on Assets

best life insurance based on assests


Life Insurance Providers with Highest Net Worth

life insurance providers with highest net worth


Best Life Insurance Companies Based on Net Income

best life insurance companies based on net income


Q3: Why do you have to get Life Insurance?



I once asked myself, “Why should I have life insurance?”. And I answered my question, “For future investment”.



The finance topic is very close to my heart, and I’m advocating such a thing. Why? Because I would like to stop the wrong mindset of preparing ahead or as early as now your retirement years, especially about 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 disappointed in what happened to my parents, I’m encouraging young adults that 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

deepest why of getting life insurance


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.




Q4: How to avail of Life Insurance in the Philippines?



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 approve and then eventually to the initial premium payment.



Somehow, the above process is related to what I’ve found while researching the life insurance application process. From one of AIG Direct’s articles, the following is the process that could be a guide to you too.


availment of life insurance

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 the 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 consult a financial advisor or expert to understand what to do next or a brighter approach.




Q5: Who is your Financial Advisor?



Choosing a financial advisor was my top consideration when I decided to get a life insurance policy.



Why?



My simple reason was to connect with that person who will help beyond money. I’m saying that someone who has the sympathy for 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.


your ideal financial advisor

Disclaimer: For illustration purposes, not sponsored.


I called it the 3 C’s describing my financial advisor.


1. Compassion to help – she does beyond what she gets, and provides you with 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 where 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, and a certified/licensed financial planner is 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.




FINAL WORD



If you decide to get life insurance in the Philippines, the following 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 in the Philippines?


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 blog.


Feel free to leave a comment.




Thank you and God bless you.

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