It’s not in the movie, but I guess if superman meets an Insurance Agent, he would be in for a lengthy discussion on the importance of Life Insurance in his super-career.
And I know how it would turn out: Regardless of how impressive the presentation is, Superman would flat-out refuse to get an Insurance Coverage.
Life Insurance? Duh – he doesn’t need it.
Three reasons why:
1. He doesn’t have kids or anyone dependent on him for financial support.
He doesn’t have to think about his kids, adopted children, a bunch of nieces and nephews when he’s gone.
He doesn’t have a favorite charity either.
Savvy travellers and modern nomads have this favorite mantra: “Travel light.” I think superman is the ultimate embodiment of that philosophy.
( Tip: How to setup an Emergency Fund. )
2. He is not married.
Not only has superman got no kids, he doesn’t have a life partner either. That hunk is still single and very much available.
Well, at least that’s how it was in the movie. So ladies, in case he’s your super kind of guy, you know what to do.
Seriously, the only other reason – aside from children and love ones – that you need life insurance coverage is when you have a life partner.
And not just any pick-up partner. Legally in the Philippines, that should be the one specified in your Marriage Certificate.
3. He is not a human being.
Here in the Philippines, life insurance can only be applied to a human life.
Some countries have strange life insurance products that cover the lives of pets like dogs and horses.
I’m not sure if superman is an alien or a demi-god, but underwriters should be smart enough to deny him life insurance coverage, even if it’s very profitable for the Insurance Company to have him as a client.
Q: How about Health and Disability Insurance?
A: Those are not for him either.
( Good to know: Life Insurance Products in the Philippines. )
But, but, but… you are not superman.
You are more likely to experience life situations commonly shared by all human beings inhabiting the Planet Earth.
I’m talking about things like:
- Getting sick. We’ve been there at one point or another.
- Meeting an accident. It could happen anytime.
- And… knock on wood, being greeted by friends with RIP messages on Facebook.
It’s the sad fact of life and it could happen to anyone, sometimes in a very unexpected moment.
As a general rule, you SHOULD get a life insurance policy if:
- You have a spouse and/or children.
- You have an income.
- You have health.
- You have wealth and assets.
- You have dreams.
Allow me to elaborate each one.
( Interesting read: The Financial Planning Pyramid. )
5 Reasons Why You Need Life Insurance
1. You have a spouse and/or children. Give Them Peace of Mind!
If children are part of the deal, then life insurance policies for both parents are already a necessity… not just a fancy financial accessory.
In either case, you should get a policy large enough to maintain the current lifestyle of the love ones who are left behind when you’re gone to the other side.
That’s what every responsible parent or life partner should do.
( See also: Financial Planning for Different Live Stages. )
2. You have an income. Protect it!
For most of us, our income depends on our ability to be present at work.
Have you ever thought about the time when, for some reasons, you can’t work anymore?
That means no income also. As they say, “No work, No Pay.”
Another way of thinking about Life Insurance – and its cousin Disability Insurance – is to consider it as an Income Protection Tool. If you can’t work anymore due to disability, then it goes to work for you.
A note on Disability Insurance: They are usually attached as rider or add-on to a Life Insurance Policy.
( A good read: Jumpstart your Personal Financial Engine. )
3. You have health. Don’t lose it.
If you have been to a hospital lately, you already know that it’s one of the biggest financial sucking institutions in the Philippines. Being confined in a hospital for illness or accident even for a day is indeed very stressful emotionally, physically and financially.
Being covered by Health or Medical Expense insurance in a way helps relieve the financial tension when the medical bills are presented in your face.
However, getting this type of insurance coverage is very expensive that most Filipinos simply pass it up or ignore it altogether.
Here’s a tip: It’s cheaper if you get this in groups – that is, Group Health Insurance. If you are working for an employer and they have this employee-benefit program, make sure that you participate.
Note: Health Insurance could be a rider to a Life Insurance Product, or it can be a different product altogether. Check out with your Financial Advisor on the kind of health insurance products that they offer.
4. You have wealth and assets. Make sure they are protected!
Have you tried getting a loan from a bank or a lending company?
How about buying a house and securing a mortgage loan?
Here is the trick used by financial institutions for all their clients who want to get a large amount of money: They require the applicants to get a Life Insurance policy. This type of Life Insurance goes by different names like Credit Life, Mortgage Redemption Insurance, etc. But essentially, it serves as a protection for the lender and assures them that your loan gets paid once you die.
Wise move, huh?
You can use the same concept especially if you have sizable assets that you need to protect against loss. Life Insurance is a financial tool that is very useful in planning for your estate.
5. You have dreams. Make them come true!
We all have dreams and maybe financial goals life.
For some, it’s accumulating 100 million Pesos in cold cash or liquid assets when they reach 65 – the ripe age for retirement! Others are targeting the same amount at age 45. Still others would just settle for 1 million Pesos – which is really not much if you are aware of the prices of items on your grocery list.
People are really different from each other and their financial goals could be different also depending on their anticipated needs and lifestyles they want to maintain. Their financial goals and dreams may or may not come true.
One of the culprits of not reaching one’s financial goals is untimely death, especially at a very young age.
However, with adequate Life Insurance coverage, your family may be able to mitigate the loss and you can actually make a short-cut to reaching that goal — if it’s equal to the policy’s Face Amount.
But of course, you won’t be there to enjoy it anymore.
Get Scared or Be Prepared
Insurance Products – and Life Insurance in particular – are essential financial planning tools.
Before you invest or do anything stupid about your money, you should get an adequate Life Insurance Coverage for any unforeseen eventualities that may happen.
There are many people in this country whose thinking is so out-of-this-world when it comes to the topic of insurance.
Some of them are valid, such as the following:
- Bad media publicity – both truthful and false reports. Once it’s out, it’s difficult to undo.
- Questionable track-record of Pre-Need Companies, some of which are started by insurance companies themselves.
- Words from disappointed plan-holders of Pre-Need Plans (like Pension and College Plans) who have been denied the promised money at the time they needed it.
I could go on and on with my list, but you owe it to yourself to know the real score of what’s been happening in the Financial Industry of the Philippines.
However, these mistakes can be avoided if Filipinos are only grounded with a solid and sound Financial Education.
That’s what we are doing here at PeraTree.com. I hope that you will help us spread the word on the importance of Financial Education to everyone of your friends.
