I got my first life insurance policy just few months before I turned 24 years old. Honestly, I didn’t care much about insurance then. I heard about it and heard the benefits of it, but I didn’t care. When a financial advisor approached me and asked me if I have insurance, I said no. From there, she explained to me why I need it and immediately I availed one, then a couple of months later I applied for a different one. And this year, I got another two policies.
You’re probably wondering why I got a few. I actually didn’t know the answer to this, until recently. The pandemic made me realize a lot of things. What a wake up call 2020 is!
I am currently 26 years old, will be 27 next month. So okay, why I got these policies?
Like I said above, I didn’t know the answer before. I just availed them because I know I will need them in the future. But when I became a financial advisor myself, I realized why.
Here are my reasons:
- Investment – this is for my future self. I realized that it’s important to make my money work for me while I am also working to make more money. I want to live a comfortable life when I retire, I don’t wanna be a burden to anyone. When I get old, I want to be able to provide for my needs.
- Health Needs – we will all get sick, we just don’t know when. We just have to be prepared for it.
- Income Protection – I am my family’s breadwinner. If I’m suddenly taken out of the picture, who will take care of them and their needs? At least, I have this peace of mind that I’m gone, they will be able to continue their lives without me and they will be taking with them my love even if I’m no longer around. It shows my love and care for them.
As for the investment, I know it’s not guaranteed. It will have its highs and lows, and that’s okay. I am still young and I am willing to take risks. Most importantly, when I get married and if I do get kids of my own, I won’t oblige them to provide for me because I have already taken care of it. I will encourage my kids to live the life they want, and that they won’t have to provide for me.
For my health needs, it will be very costly in the future due to advances in medical science and of course, inflation. That’s why I got two for this. I know a single health insurance policy with a sum insured of 1 million pesos won’t be enough in the future, so I got another one with a 1.5 million pesos sum insured. In case I get diagnosed with a critical illness (heart attack, stroke, any kinds of cancer, etc.), I at least have 2.5 million pesos to get from my health policies and I won’t have to pull out from my savings and other investments. Most importantly, I won’t be a financial burden to my family, because I have prepared for this unexpected event.
All policies have guaranteed death benefits that will go to my father and my siblings in case something happens to me.
My health insurance policies are worth 53,000 pesos per year, both will give me a total coverage of 2.5 million pesos in case I get critically ill and my family will get a death benefit if ever something happens to me.
Let’s say I pass away at age 80… *knock on wood*
53,000 x 53 years = 2,809,000 pesos.
I can do two things with this 53,000 pesos:
- Religiously save up P53,000 for 53 years and hope I won’t get sick so that my savings won’t go down the drain.
- Put P53,000 in life insurance and let the insurance company pay for my P2,500,000 hospital bills plus the death benefit, plus other benefits that I included in my plan.
If I get sick at 50, I only paid P1,219,000 but I will get P2,500,000 in hospital benefits.
Why would I ever let my family to get financially burdened with my own risks? I don’t want my family to be drown in debt in case this unexpected event happens.
Worry and anxiety only happens when you are not prepared. But I am.
I am thanking my 24 year old self now for saving, investing, and believing in life insurance. My only regret was not starting earlier than that. But I know my future self will be thanking my 24 year old self for all of this.
So, which companies did I buy from? AXA Philippines and Insular Life, so far.
I hope you learned something from this and I hope you will protect your future self now. You only got one YOU. No one can protect you, but you alone.
*This post was inspired by Nomad Finance Girl’s post.