There used to be a time when life insurance was something we only learn about when a friend becomes an agent and offers it to us, or when a person insured, having made us their beneficiary, passes on. In the last few years, however, more and more Filipinos are becoming increasingly aware about the role life insurance plays in their lives, if the growing premium income in the Philippine life insurance industry is of any indication.
But regardless of how many people are getting policies, the question remains: Is life insurance important to Filipinos? Here at PesoMatters, we see life insurance as a tool that can help us plan our lives better. Here are some arguments that helped us come to this conclusion.
A tool for income protection
Life insurance is important if you’re the primary breadwinner in your family. The main purpose of life insurance is income protection. If you, the insured, meet an untimely death, your beneficiaries will be entitled to the full death benefit specified in your policy sans any applicable charges. It doesn’t matter whether you’ve only started paying for the premium today, your beneficiaries will still receive the full amount.
As the primary breadwinner, the death benefit will go a long way towards helping your beneficiaries manage expenses. If you have kids, the money can help with tuition. If you’re paying for a house, the money can be used to help keep up with monthly payments. Of course, every policy comes with its own stipulations. In some cases, deaths under certain circumstances are exempted from the contract. Failure to disclose pre-existing health conditions can also disqualify you. Make sure you review the terms carefully.
A form of healthcare
Life insurance is important if you’re concerned about the costs of healthcare. Another compelling reason for you to get life insurance is if you want to prepare for the possibility of contracting a serious illness. Considering the number of risks we’re constantly exposed to—chemicals, fatty foods, pollution—it’s a legitimate concern.
Life insurance benefits geared towards critical illnesses are helpful because they can either result in a lump sum or a daily cash benefit upon hospitalization. As usual, such policies have certain stipulations. Not all illnesses might be covered. if you have pre-existing conditions or if certain serious illnesses run in your family, life insurance companies aren’t likely to approve your application for a policy either. Again, make sure you review the terms carefully before signing anything.
A source of emergency funds
Life insurance is important if you want to have funds you can draw from in times of emergencies. To be clear, the death benefit will remain untouchable until you, as the insured party, pass away. However, some life insurance policies offer dividends or potential profits from mutual funds even as you pay for your policy. If you want to have a flexible investment plan that gives you protection at the same time, a life insurance plan is worth looking into.
It must be said, however, that withdrawing funds from these policies is not recommended. If you’re left with no choice, it’s often advised that you deposit the amount back into the policy when you can.
These are just some of our thoughts on the matter. At the end of the day, only you can decide just how important life insurance is to you.
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