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10 Tips for Creating a Comprehensive Plan for Life Insurance in the Philippines
10 Tips for Creating a Comprehensive Plan for Life Insurance in the Philippines
A comprehensive life insurance plan is a must for financial security and peace of mind for you and your loved ones. In a country such as the Philippines, with the growing awareness of structured life insurance in personal financial planning, it can offer great advantages. Here are ten ways to create a comprehensive insurance product based on life coverage:
Examine Your Financial Needs
Calculate Expenses: Account for the current and future needs of your family members, the cost of educational programs, outstanding loans or other liabilities, pending personal goals, other dependents, and parents.
Financial Goals: Mark out your financial goals, like whether you would invest for your life after retirement or for buying a home, so you can assess the coverage required.
The Right Amount of Coverage
Consider having a policy of 10-15 times your income at the least as a thumb rule to ensure a replacement of your income for many years.
Use financial quotient calculators available online or professional consultations to interact and customer-tailor your coverage requirement according to your specific needs and circumstances.
Choose the Suitable Type
Term Life Insurance: Duration-based (e.g., 10–, 20–, 30–year) policies are generally inexpensive and most apt for income replacement/ debt coverage.
Whole Life Insurance: This is a permanent kind of insurance that remains in force for your entire lifetime and a savings component. It can have a place in your estate planning and long-term financial plans.
Consider the Beneficiaries
Primary and Contingent Beneficiaries: Clearly identify who should be the primary and who the contingent, so the insurance monies will pass to your intended first, second, etc.
Keep Your Designation Up to Date: One should have an up-to-date beneficiary designation because, legally, after your death, the next legal document is the beneficiary designation form of your life insurance.
Consider Policy Riders and Add-ons
Additional Protection: Riders like critical illness, accidental death, and waiver of premium offer additional protection depending on your needs.
Cost-benefit Analysis: Evaluate the cost and benefit of riders individually to see if they are worth it and add value to your cover.
Compare Insurance Companies
Search: Shop around and get quotes from several companies and compare the premiums, coverage, and quality of service.
Seek Independent Agents: Independent insurance agents can provide you policies of various companies and will help to identify the better deal available in the market.
Know Details of the Plan you Purchase
Fine Print: Go through the terms and conditions mentioned in the policy, such as exclusions, report claim not settled, and claim procedures.
Ask Away: Even if a kid repeatedly asks his questions, don’t stop asking questions to a policy agent or the company about any part of the policy that you do not understand.
Review Your Plan
Yearly Review: Carry out a yearly review of your life insurance plan. See to it that the plan still suits your requirements and make amendments if needed.
Changes in Life: Make necessary changes in your policy according to changes in your life cycle, like marriage, having kids, switching jobs, or substantial change in income.
Check Long-Term Premium Affordability
Pocket-Friendly: Afford the premium amount from your pocket over a long-term duration. This will help the policy not to lapse.
Options for Premium Payment: Check out the types of premium payment options offered. There usually are different modes of premium payment like yearly, half-yearly, or monthly.
Seek Professional Help
Through Financial Advisor: Personalized advice and guidance from a financial advisor will help you frame your comprehensive life insurance policy according to your requirements and income strategies.
Stay Informed: Keep up-to-date on life insurance product features and market insights to be able to make well-informed decisions about your life cover.
Conclusion
Putting up a complete life insurance program in the Philippines involves a proper assessment of your financial needs, the selection of the appropriate insurance, the evaluation of policy options, and the need to revisit your plan regularly. By adhering to these ten tips, your life insurance plan will guarantee adequate financial protection and peace of mind to both you and your beneficiaries. A well-structured plan will be able to secure your family’s future and simultaneously help you achieve your long-term financial goals.
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A multi-award-winning blogger and advocate for OFWs and investment literacy; recipient of the Mass Media Advocacy Award, Philippine Expat Blog Award, and Most Outstanding Balikbayan Award. Her first book, The Global Filipino Bloggers OFW Edition, was launched at the Philippine Embassy in Kuwait. A certified Registered Financial Planner of the Philippines specializing in the Stock Market. A recognized author of the National Book Development Board of the Philippines. Co-founder of Teachers Specialist Organization in Kuwait (TSOK) and Filipino Bloggers in Kuwait (FBK). An international member of writing and poetry. Published more than 10 books. Read more: About DiaryNiGracia
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