The Modern Filipino’s Guide to Investing in Life Insurance

Life is unpredictable. You can plan your schedule for the next day, but there’s nothing to prevent detours, speedbumps, or surprises both good and bad to change your plans.

Despite this, however, you wouldn’t want to leave the future of your family to chance. Should life’s unpredictable events lead to your untimely death, you could be leaving your family in a difficult financial situation. To protect them, it’s best to be prepared.

Life insurance is a smart investment plan for people in the Philippines looking for practical financial solutions for their family in case of their death. In this article, we’ll explain what every Filipino needs to know about life insurance: what it is, the benefits of investing, and why InLife should be your go-to insurance provider for your family’s financial security.

What Is Life Insurance?

Think of life insurance investment as a contract between you (the policy holder), and an insurance company (the insurer). You agree to pay the insurer premiums for a certain amount of time. Upon your death, the insurer will give your beneficiaries a lump sum payment that’s known as a “death benefit.” This sum can keep them financially secure even after your passing.

Who Needs to Invest in Life Insurance?

Ideally, people who have families or dependents should have life insurance, especially if you are the main or sole person providing income to spend on your family’s living expenses. These include:

Parents with minor children – If one or both parents die before a child reaches maturity, life insurance can provide a child with financial resources for their education and living expenses until they can support themselves.
Parents with special-needs children – Some children with special needs may need lifelong assistance even into adulthood. Life insurance can ensure their child has the financial resource to access special care when their parents are no longer around.
Adults with joint property – If you and another adult (e.g. spouse, fiancé, sibling, business partner) own properties like residential and commercial buildings, companies, vehicles, and other expensive properties, your death may make it difficult for them to continue paying for upkeep, loans, and taxes. Life insurance can allow them to get by.
Families that cannot afford funeral expenses – The cost of a private funeral in the Philippines can fetch hundreds of thousands of pesos minimum. If you feel like your family can be financially secure enough but may not be ready for the unexpected costs of a funeral, your life insurance can be used to pay for your funeral.
Young adults with no dependents – Even if you don’t have dependents yet, it may be smart to invest in life insurance now while you’re young and healthy. We’ll talk more on this later.

How Does Life Insurance Work?

The concept is simple: pay life insurance premiums for a given amount of time, and upon your death, your beneficiaries are covered and entitled to a death benefit. However, this is where it gets a bit complicated since life insurance is different between all policy holders.

Your premium is the money you’ll be paying for your death to remain covered by the insurance company. How high or low your premium is depends on the likelihood your insurer will have to pay your death benefit, or in short: your life expectancy. A healthy 25-year-old with no pre-existing condition, therefore, will have a much smaller premium than a 40-year-old with pre-existing conditions that could give them a shorter life expectancy. Other factors that can affect your premium include:

Age – Younger Filipinos are less susceptible to diseases and conditions that shorten their life expectancy.
Gender – Women and men are more prone to certain conditions that could affect their life expectancies.
Medical History – Those that have been treated for or have a pre-existing health condition may pay a higher premium.
Occupational Hazards – Some jobs (e.g. driver, engineer in a construction site, electrician) have bigger chances of fatal workplace accidents than other jobs (e.g. white-collared desk jobs).
High-Risk Hobbies – Heavy smokers and drinkers have a shorter life expectancy compared to those who don’t.
Larger Death Benefits – Policy holders that want a bigger death benefit for their beneficiaries can expect larger premiums.

What Type of Life Insurance Is Best?

There’s really no one type of life insurance that’s best for everyone because people have different needs and preferences for the kind of insurance they’re investing in. So, it’s best to research all your options before choosing one.

Term Life Insurance – Lasts for a limited number of years, usually between 10 to 30 years. If your policy expires and you don’t pass away from unfortunate circumstances, your premiums are returned. A zero-risk investment that gives you and your family some peace of mind. This is a good option for those looking at death benefits as their income replacement for their family during their working years.
Learn more about InLife’s Basic Cover Plus and how you can get double coverage: pay for 10 years and be covered for 20 years. Get your money back plus a maturity benefit.
Permanent Life Insurance – You pay premiums for the rest of your life until you pass away. Provides lifetime coverage.
Level Term – Pay a fixed premium every year from start to finish.
Increasing Term – Your premiums get bigger as you get older.
Single Premium Payment – Pay one single premium up front instead of making smaller payments.
Whole Life Insurance – Similar to permanent life insurance, but it accumulates cash value.
Universal Life Insurance – Similar to whole life and permanent life insurance, but premiums and death benefits can be adjusted.
Final Expense – Small life insurance meant for funeral expenses, though beneficiaries aren’t required to use the death benefit on this.

Is Life Insurance a Good Investment?

Life insurance is a good investment for the modern everyday Filipino who have people they want to protect financially even after they pass away. Depending on the type of life insurance you invest on, if you’re investing on the right type of insurance for your needs, you and your family can benefit from the safety blanket life insurance investments provide.

Unlike other investments, life insurance doesn’t fluctuate in value unlike other forms of investments. Your beneficiaries’ death benefit depends on how much premium you pay and not like investments that depend on the current state of the market.

Benefits of Life Insurance

Some of the benefits you can get from life insurance include:

Security and Peace of Mind – You get some peace of mind knowing that should anything happen to you, your family still gets some form of financial security. With other types of investments, it can be difficult for your family to have it liquidated into money that can use for their financial needs. But with a death benefit, they get the financial resource dedicated to helping them through this difficult time.
Pay Off Your Debts – If you have debts to pay, it will fall on your family’s shoulders to fulfill those debts after you pass away. Life insurance ensures that they have some financial capacity to pay your debt.
Replace Lost Income – If you are the sole breadwinner or main source of income for your family’s living expenses, your unexpected death can make it difficult for your surviving family to find income. Your family can survive comfortably on the death benefit long enough to find another source of income.
Stability of Your Business – Aside from your family, life insurance can also benefit your business partners. Should you pass away, your business partner can use the death benefit to pay for business obligations.

Why Choose InLife as an Insurer?

As the first and largest Filipino life insurance company in the Philippines, we know a thing or two about providing beneficial life insurance to everyday Filipinos. We have over a hundred years of experience in financial protection, providing you with everything you need to give your loved ones a good future and your own peace of mind for the future.

We're here to help you plan ahead, every step of the way. Talk to an InLife Financial Advisor today.