Life Insurance: A Good Investment

financial security through life insurance

A life insurance is a form of protection against the financial consequences of the sudden death of the insured individual. The beneficiary, which is usually the spouse or children, will receive the proceeds. When you buy a life insurance, you are actually buying protection, security and, of course, peace of mind.

However, some people dislike the concept of paying a company for something that they won’t have a use of at present. For them, obtaining an insurance policy is and will never be a sound investment.

Is that really the case? Let’s explore the topic further.

Financial security through life insurance

Before anyone must purchase a policy, he or she should consider his or her current financial situation. What is your current standard of living? Do you want your loved ones to maintain such? Do you have enough savings so that your dependents can continue living the lifestyle that they want? Coping with a death in the family is serious enough, and abrupt lifestyle changes can only interfere with such. Further, it would take years before your children to cope with these changes.

Even if you think your family will adjust well after you’ve been gone, there will be major financial responsibilities. Who will foot the final hospitalization bill? What about your funeral costs? On average, you will need about $5,000 to $8,000 to cover the funeral expenses. Such amount is hard to come by unless you and your family have emergency funds.

What about the ongoing expenses such as education and amortization that is well covered when you are still alive? When you die, future income is already lost. Even if your spouse and elder children are already earning, there is still a difference when there are at least three family members who contribute to the monthly expenses. Will you risk your dream home or your children’s dream of becoming somebody someday?

From these considerations, we can say that a purchase of a life insurance is indeed a good investment. Investment in the sense that we are protecting the future of our loved ones even after dying. A coverage is the simplest yet most essential protection available that also ensures that future needs of every family member are met.

True enough, the only certain thing in life is change, and death is a major inevitable change that we had to face. We all have an adversity contemplating our own death. However, a life policy presents itself as a proactive death planning tool. If you care about the future of your dependents, it is surely worthy to invest in one.

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Five Reasons You Might Need Car Insurance

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“She is not just four wheels and an engine. She is home” -Author Unknown

Owning a car is possibly one of the biggest investments you can make. And what do you do with your investments? You protect them with insurance. Protection aside, there is a myriad of reasons why you would need auto insurance—in some cases, it is required by law, and at other times, it is also for your own protection. Seeing as the car is already a big investment by itself, you might think that having auto insurance is just another unnecessary expense.

But take note, if you can afford to buy a car but not insurance, then you cannot afford to purchase a car. In any case, before you buy a car insurance in the Philippines, here are some excellent reasons to strengthen your resolve to do so:

1.) It is required by law

In the Philippines, traffic mayhem is rife which makes auto insurance essential. By law, you are required to get basic Compulsory Third Party Liability car insurance (CTPL) to protect against possible liabilities to third parties. Third parties could be anyone but the driver, passenger, family member or household member of the one who owns the vehicle.

CTPL is necessary as it would protect any pedestrian from potential damages or injuries that might have resulted from driving and use of an insured car. The coverage extends from body injuries to deaths that could be up to a hundred thousand pesos. However, damage or loss of property is not covered by CTPL and is limited in this regard.

2.) Your car is an expensive asset

The average brand new car in the Philippines would cost you almost half a million. As a result, it would be the second most expensive purchase most individuals would make in their lives.

Furthermore, most people would buy cars as it would make any of their trips convenient owing to the service they provide to their owners. With all this combined, you can easily see how protecting it adequately is paramount. Getting yourself car insurance is one way to protect this new asset.

3.) You cannot have a new car without it

In some cases, you cannot purchase a new car that includes a loan as you would not qualify if you do not have a full auto insurance policy. Additionally, you would not qualify to lease a vehicle either.

Most lenders would want the assurance to be paid. So, as a necessary consequence, if you figure in an accident without car insurance to defray the repairs, you would not be able to pay the company that provided you with a car loan. To ensure you keep paying this, you should get your car insured.

4.) Cars are important

If you use your car on an everyday basis and skip on car insurance, you would not be able to use your car if you get into an accident while driving it. This is especially the case if it sustains damage wherein you cannot afford to have it repaired.

Repairs and fixes are things covered by auto insurance and would help you get to where you need to be and make your necessary daily trips more convenient.

5.) Provide legal protection

No matter how cautious and mindful we are, accidents are an inevitable consequence of driving—whether we like it or not. Furthermore, accidents that involve third parties would likely land you in a legal snag—regardless of whether it is your fault or theirs.

This means that there is nothing stopping anyone from suing you and even if you do win the case, you would still have to pay the necessary fees in litigation. Your auto insurance would help you and serve as a buffer between any legal claims and your wallet. Some coverages would include providing an attorney to handle lawsuits arising from automobile accidents.

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Everything You Need to Know About Travel Medical Insurance

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“If you cannot afford travel insurance, then you cannot afford to travel” – Author Unknown

There are many types of insurances in the world, and each one offers a coverage different from the rest. If you are a frequent traveler, then you might consider getting yourself a travel medical insurance in the Philippines.

What is travel medical insurance?

Travelers who frequently leave their home country might essentially need travel medical insurance. It is a type of insurance that would offer coverage for any type of medical emergencies and evacuations depending on the policy purchased. Depending on where you get yourself insured, this insurance can either be known as International Travel Insurance, Worldwide Medical Insurance or even International Medical Insurance. This mainly differs from other types of insurance considering that it is a coverage that protects you while you are out of your home country. There are many insurance coverages with policies stipulating that you would not necessarily be covered for any accidents, illnesses or emergencies occurring while you are abroad.

What is the biggest difference?

The main difference lies one what this type of insurance focuses on. With this travel medical plan, the focus mainly lies on emergency medical and evacuation costs and not necessarily travel cancellation coverage costs. Should you be abroad and contract a disease or figure in an accident, it would readily cover any medical costs for you. Most insurance plans would include emergency dental treatment and emergency transportation services.

If you have an accident in a remote area, emergency medical evacuations should be able to get you out of there and transport you to a place where you are given appropriate medical care. Furthermore, most travel medical plans would include some Accidental Death and Dismemberment term life benefits which are paid for.

It is usually cheaper than trip cancellation insurance

Apart from being useful on a trip, getting a travel medical insurance is the more practical and economical way to have an emergency medical coverage abroad. The cost of most medical plans would vary depending on an individual’s age, coverage amount, and trip length.

On the other hand, trip insurance with consideration to cancellation, delays, interruption, baggage coverage, etc. would be mostly based on the cost of the trip. Considering all these, it would be easy to see that a trip insurance would set you back by thousands of pesos whereas medical plans would be a lot cheaper.

Why you need travel medical insurance?

Much like everyday life, you can never truly predict what would happen to you during your trip. In some cases, foreign food might not agree with you and would give you a severe case of food poisoning. In another case, you might get into an accident while in traffic or have any of your family members injured. These are all likely cases of why you might want to consider having a travel medical insurance coverage. Furthermore, having this type of insurance will give you the guarantee and assurance that you would have travel medical assistance services in case of an emergency abroad.

What does it usually cover?

While the coverage differs from one insurance company to another, a Travel Medical insurance plan typically includes the reimbursement for unexpected medical costs due to emergency medical care as well as unexpected dental costs. Additionally, it would provide advance payments to medical facilities in order for you to have emergency medical transportation should you be injured. Lastly, it provides for travel accident benefits which would take care of you and your family should you be severely injured or killed while traveling and emergency travel assistance services. The latter would help you located a proper medical facility to take care of your and your family’s medical needs.

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Five Things You Should Know About Auto Insurance

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In the Philippines, the average brand new car costs almost half a million pesos nowadays. Considering the exorbitant price you pay, it is readily assumed that your vehicle is one of the biggest investments you would ever make in your life. To protect this expenditure and asset, getting an auto insurance should not be a matter of the question when—but rather, it should be automatic.

For this reason, it is imperative to include an auto insurance when you are calculating your budget. After all, you would not only be paying bills to defray the cost of your car loan—but your car insurance as well.

However, do not just simply buy whatever auto insurance you can immediately find. You need to be a little meticulous about how you select an insurance for your car—take into account more than just the monthly premium you will be paying and think about what the insurance policy actually covers.

Experts may encourage you to buy as much auto insurance as you can afford, but this is not necessarily helpful. To have a better understanding of what you are paying for, it is best if you know the basics of how it works and which coverage you should have and skimp on. Understand what the best auto insurance coverage is for you and select that.

So, if you are planning to buy a car insurance in the Philippines anytime soon, here are a few things you should know:

1.) Some of the most helpful coverages are the cheapest

Typically, liability insurance would be the most expensive and as it should be. Most common coverage limits would mean that your insurance is on the hook for a great deal of money for any kind of damage that you do. However, not all coverages are the same, and most of them would be capped by the value of your car.

You might neglect to get optional coverages such as roadside assistance, rental reimbursement, and gap coverage but these are actually necessary for optimal protection with just a little price increase. Paying a bit more than usual would not be all for naught. After all, it could potentially save you a lot of money in the future.

2.) Many factors would affect your insurance rate

Your car insurance rate does not only depend on the make and price of your car. Depending on the auto insurance company, the criteria can mean a myriad of things when it comes to evaluating an insurance application.

Guidelines in each company differ in the sense of which drivers they want to accept and how much they would charge those groups they consider to be at a higher risk. Underwriting is the term given to the process of evaluating an application. It is usually done automatically and by a software behind the scenes.

3.) Insurance prices vary by company

Much like how life insurance prices differ from one company to another, auto insurance prices vary a lot by the company as well. This is because each company has its own formula to assess and evaluate a risk. From there, they will evaluate how much you pay for the coverage.

As a consequence, no two insurers would offer the same price for the same policy. Considering this, comparing prices is paramount to choosing the best insurer. After all, if you do not compare rates, you would likely end up overpaying or lacking in some coverages.

4.) You will potentially pay more if you let your policy lapse

Auto insurance companies view drivers who have licenses but without car insurances as reckless, irresponsible and risky. Considering this, letting a policy lapse means that you are likely to pay more when you do buy insurance.

Prevent this, make sure to acquire and pay for your car insurance before your current policy is canceled.

5.) Discounts can make a significant difference

You might think a safe driving record, anti-theft devices, and car safety features are negligible things, but it actually contributes to a significant difference in what you pay for your auto insurance.

Many companies would offer you discounts for this such as this—most especially if you opt to pay in full.

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Two Questions to Consider Before Getting Permanent Life Insurance

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“Life insurance became popular only when insurance companies stopped emphasizing it as a good investment and sold it instead as a symbolic commitment by fathers to the future well-being of their families.” -James Surowiecki

 

While life insurance has been marketed as an ingenious savings plan that would inevitably serve as your family’s contingency money in the event of your death, it has been considered and advertised as a unique investment scheme prior to that. But as more and more people were hesitant in buying into an investment scheme that would take a considerable amount of years for a payoff to result, it has since then been promoted as this plan that looks out for the future well-being and welfare of their families.

As a result, more individuals are receptive to purchasing an insurance policy than they would have been years ago. However, this does not diminish an insurance policy’s potential for investment as today; there are still many individuals who would likely buy life insurance just to be able to invest.

If you are planning to invest your money in an insurance policy, make sure you talk to an expert on the field as well as a qualified agent well-versed with insurance in the Philippines. Some companies would likely give you the option of investing in permanent life insurance where part of your premiums would be invested, and some of it can even be borrowed tax-free for retirement or anything else—all that apart from the death benefit your heirs will get when you pass away.

However, before you jump the wagon, ask yourself these two questions and consider when it comes having permanent life insurance:

1.) How much life insurance do you actually need?

Asking yourself how much life insurance you need is paramount as you want to make sure that you buy as much as you need. Expensive and exorbitantly priced permanent policies would mean that you can afford to buy less which is not a good idea on the whole. You are buying life insurance to make sure your family is adequately covered financially if something were to happen to you.

So, it would only make sense to buy as much as you need but never less. In the same vein, you should not buy insurance that you do not need either as you are likely to spend more in it than what you or your family are expected to receive. Weigh your options and consider that your insurance company has to collect a series of premiums not just for benefits, but to cover their expenses as well.

2.) How long will you need the insurance?

Permanent insurance is incredibly expensive as its primary purpose is to cover for your entire life while cheaper term policies cover you when you are younger and are less likely to use it. However, people are under the mistaken notion that once they retire, they would need a lot of insurance but on the contrary, they usually do not. Mainly because they no longer have any dependents apart from the spouse who lives off from Social Security, some assets or pensions anyway.

But if you do not have enough assets to cover final expenses such as funeral costs or at least want a small policy to cover these so as not to be a financially cumbersome task to the family, you would need insurance in retirement.

Furthermore, if you fall into the second category of having a dependent who would not have enough income should you pass away, then you would also essentially need insurance even in retirement. Lastly, those who have taxable estates and would want to have life insurance as an option to pay out the estate tax should consider this option as well.

This is especially useful if they do not want their heirs to sell a business or make taxable retirement account withdrawals just to defray tax payments. However, if none of the three would apply to you, then you might want to reconsider getting permanent life insurance.

 

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Insurance 101: Five Insurance Policies Every Individual Should Have

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“Fun is like insurance, the older you get, the more it costs” –Kin Hubbard

Getting insurance has always been a source of internal debate with a lot of individuals. More often than not, people tend to see it as an additional expense they would not be able to fully enjoy—or something akin to a delayed gratification that they would only be able to enjoy in years to come.

However, you would be surprised to know that getting yourself insured is getting a safety jacket for yourself—figuratively that is. You might not need it now, but you would be so grateful for it once you are in a car wreck, experience illness, have your house razed by fire or even when you are swimming in debt.

The truth is, once you have yourself insured, you will sleep a lot better knowing that you are adequately covered should anything untoward can happen. After all, one of the best guarantees getting insured can give you is peace of mind. However, covering all of your bases might be a little complex, and you might need to know which insurance coverages you should have and which ones you do not necessarily need.

So, before you visit companies that specialize in insurance in the Philippines, it helps to have an awareness of what policies you should have.

1.) Auto Insurance

If you have a car, chances are you are going to want to have it insured. No matter how safe you claim to drive, having car insurance is paramount as you would not want to be inundated with auto bills should anything untoward happen to your car. Car accidents are inevitable, and more often than not, they would not be your own fault—getting your cars insured would help you defray the cost. Choose an auto insurance that has adequate liability insurance—one that covers anything you might have caused in an accident, from the damage to the car to the health of the humans inside.

2.) Health Insurance

Health insurance is self-explanatory but to elaborate, just think of how vital your health is. No matter how young or robust you are, your body is going to experience diseases and ailments all throughout your life. Leaving yourself uninsured is like setting yourself up to pay for medical bills for years and even decades depending on the severity of the illness. You and your family should never go without it.

3.) Homeowner’s/ Renter’s Insurance

You will never know when disaster will strike and do damage to your home and possessions. When it does, leaving your house uninsured means that you would have to pay for the repairs and replacements out of your own pocket. To guarantee that your home insurance covers everything, log your possessions and take pictures should you need to make a claim. Additionally, it would be helpful to get a homeowner’s insurance that includes you have a guaranteed replacement cost.

4.) Disability Insurance

Much like health insurance, you can never really predict if a certain illness or particular accident will render you unable and unfit to perform an existing job. This holds true for long-term disabilities as well which is why some companies would offer great rates. Being unable to carry out a job means that your current income would suffer, look for a policy that covers at least sixty-five percent of your income should you be unable to perform the job you are required to. In this way, you are still covered even if you are unable to generate income.

5.) Life Insurance

If you care for your family, you will not leave them in debt and without a shilling should anything happen to you. Getting life insurance means that even after your death, your family will still be financially able to get on with their daily lives and would be able to cover the burial expenses while they are grieving.

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Are You on the Right Path to Financial Freedom?

Being financially secured is a fancy thought. Who wouldn’t like the idea of living a comfortable life after retirement? We all do.

Unfortunately, just like any other dreams, having sufficient finances for your future can never be realized in the absence of money stashed away for that very purpose. Becoming stable in the future needs planning and one should be willing to commit to saving money at a regular basis.

Still, despite knowing this, we see a number of people who still fail in long-term savings. Instead of adding increments to their money, they end up exhausting it eventually.

So how exactly would you know if you’re on the right path to having that financial freedom you long for in the future? Below are some of the most common signs.

You have healthy savings.

Check your bank account and see how much you have stashed away. It doesn’t have to be something significantly big. However, you must be able to notice the frequency of your deposits. If you’ve consistently put in some amount, then that’s a good sign. It means you are committed to saving something for your future.

You don’t worry much when emergencies happen.

Emergencies can happen anytime, and they can strike at your most unexpected moment. When you have some healthy savings, you don’t worry so much once they strike. For instance, if one of your family members has to be hospitalized for some health complications, then you need not to panic and worry so much since you know that you’ve stashed a certain amount to be used in paying for the hospital bills and medicine.

You know how to say ‘No.’

Hanging out with friends and enjoying all sorts of recreation may sound like a really nice investment of your time. After all, they say it’s better to invest in experiences, right? However, there is a certain degree of danger in this type of mindset.

Remember that in most cases, spending time with friends out require you to spend money as well. While nothing is wrong with this, constant hanging out would mean you’ll spend more too! So imagine how much money you will lose if you always say ‘yes’ to some friendly invitation.

Keep your social life healthy. However, be ready to say ‘no’ too!

You strive to become better at managing your finances.

Financial management has never been easy. Even with the help of experts who assist clients in handling their assets, there are still factors that make it difficult for individuals to keep managing their money efficiently.

One sign that you are treading the path to financial security is when you show the willingness to manage your assets and strive to refrain from detrimental habits like impulse buying and frequent shopping spree. By constantly allowing oneself to learn how to manage his or her finances, the chances of inculcating a saver’s mindset is also developed.

There are no shortcuts when it comes to achieving a solid savings for your future. You will need to work for it in or out and ensure that you stay away from the constant temptation of having to spend money even for unnecessary things.

Taking on the challenge

Being financially secured requires a process, and it’s continuous. The earlier you start the better. It takes both courage and discipline to be consistent and temptations to spend are everywhere. Strengthen your resolve and take the brave step to a more secured financial status now!