Before we dive deeper, a brief intro about me:
- I got the life insurance policy at 20 years old, i’m a non-smoker, non-drinker, and i have no history of any life threatening diseases.
- I have no dependents yet, be it a child, an aging father, mother or siblings.
- Should I lose my job, or a recession breaks out, I can literally go back home or find another job, because finding a job in IT is quite easy and fast these days (unless the whole IT ecosystem collapses)
- I am not a financial advisor, and I am writing this based on my experience. I am not compensated by any companies I will probably be mentioning.
So some questions you might ask:
1. Why do I even need the policy?
You need a life insurance policy if you know that someone will cry at your funeral, be it your husband, or your child. If you have a mortgage, you absolutely need the insurance so that you won’t burden your partner and your child will be able to finish school. If you are the sole bread winner, you need it so that your siblings will be able to continue living. So I do not have any of those problems, except that I don’t want my parents to be burdened when the unfortunate does happen. Both of my parents are OFWs (Overseas Filipino Workers), but they are still on the stage of their lives where they are trying to build up funds for their retirement. They started late, so they should be aggressive now, if they want to retire comfortably
2. Where did I get it?
I actually had one before – and it was made out of pressure. So, I was walking in the mall, still new in the city. The agent came forward and asked me to fill in some form for a raffle for a trip to hong kong (sounds familiar, huh?) They asked for my balance in my account, and I think that was the reason why he was so aggressive and actually made me go to their office in the higher-floor to listen to a free seminar in exchange for the free raffle. So, it was an hour of discussion with an agent who was so good in what she does, that by the time I was out of their office, they persuaded me to purchase an endowment policy for retirement, and also persuaded me to pay for the annual premium on spot – without any in-depth idea about the kind of policy I just paid! When I went home, I searched for the company, and there were similar cases – it was Cocolife. I didn’t renew it once I got my new policy from Sun life.
I highly recommend getting an insurance, but before you buy one, make sure you’ve made your research, and you know the company well. Please. The good thing with my recent one was that I never paid for the policy on spot. The financial advisor gave me 2 proposals based on what we discussed, and I had a lot of time to read it overnight. I even asked for 2 more proposal, for a term insurance, because I felt that having a VUL Insurance is not right for me, since I’m already invested in the market. Note that, Sun Life financial advisors promote its newest policy perhaps because it’s fitting for Filipinos, and sadly on the bad side it has more commission potential because it’s more expensive. That is why you need to do your research, because there are cheaper alternatives that should have been enough.
3. How much did I pay for it?
The first one from Cocolife, I paid more or less Php22,000 for the policy. I will be paying the same amount for the next 10 years, with some minimal changes in the annual payment as I age. It was an endowment policy, and it’s going to cover me up to 80 or 100 years old after paying premiums for 10 years. I get to receive a portion of my face value after 10 years, but it’s going to be minimal as well because the face value I was given was only P500,000 – which is a mistake because that amount is absolutely not enough (for me).
In Sun Life Financial (which will probably be my company of choice untill I retire), I got a term insurance (renewable every 5 years) for more or less P9,000 per year. It’s cheaper because I’m young, and it’s a term insurance. It’s more than enough for me now, and the policy primarily covers Critical Illnesses, too. So if I do get some unfortunate you know (diagnosis), I will be compensated immediately, which will be a big help for recovery. When I do finish the 5 year contract, by that time, I’ll probably be married and start my family, so I’ll probably switch to their new plan that covers you up to 100 year old that is primarily for critical illnesses, too. I’ve really been researching about it a lot, and I really like it.
Now, if you don’t know a thing about life insurance policies, don’t be scared and read the following:
Even if you don’t do your research, you should at least know these basic information. You might be young, and it might sound scary, but death is the only certainty in this world, and if you love your family read it now. It’s worthy of a few more pages, because it’s a long discussion, but here’s what you need to know.
1. Insurance == protection
The primary purpose of insurance is protection. There will be a lot of people who would want you to purchase plans with investment allocations – and those plans will be more expensive. But remember that you are not supposed to get anything out of your policy.
2. There are different types of life insurance policies
As mentioned, I got a term insurance from Sun Life. The annual payment of P9000 will be the same for 5 years. At the 5th year, i’ll have the choice to renew, and my annual payment will then be re-adjusted to match my age – it will be more expensive as you grow older.
There are also Whole life insurance policies, and VUL policies. You can read more about them here: https://www.policyx.com/life-insurance/
It is important for you to distinguish between these types so that you’ll know why such policies are cheap or expensive.
