You might be wondering if you really have to get different types of insurance when you already have so many expenses to deal with. Well, it's a matter of protecting your loved ones and financially protecting yourself. Is family insurance just an added expense or a must-have for securing your family's future?
Insurance makes it affordable for you to prepare for any unforeseen events such as death, disability, illnesses, and accidents. If you get the right insurance type for your family, premium payments will cost you less now than upfront and out-of-pocket payments later. Ultimately, when the unexpected happens, insurance will lessen the financial burden to your family.
What is Family Insurance?
Family insurance covers the entire family for a set amount of premium. It could be a life, health, or education insurance.
For example, if you get a family life insurance, your family members are covered in the event of your death. The insurance provider pays a lump sum to the surviving family of the insured person after a certain period. This kind of insurance policy provides a financial security blanket to surviving dependents or beneficiaries after the policyholder's death.
Insurance is beneficial to everyone, particularly for families. Here are some examples of individuals who would most benefit from getting family insurance:
- Parents with minor children. If a parent dies, a family life insurance policy ensures that their children will have the finances they would need until they can support themselves.
- Families who want to cover their health expenses. A family health insurance can help parents cover the cost of health and any medical expenses their family members may incur.
- Parents who want to secure their children’s education. Insurance covering kids’ education costs can help parents provide for their children’s future.
- Families who can’t afford funeral expenses. A small family insurance policy can provide the means to honor a late family member’s passing.
- Families who want to protect their home. A family wanting to protect their own home can benefit from insurance as it covers any damages or loss that may happen to your property.
How Much Does Family Insurance Cost?
How much you need to pay for insurance depends on the type of policy and coverage you would like to get. Premiums, however, can be as low as PHP 200.
Below are example costs of family insurance from different providers in the country:
|Sun Life||Family Armor||*Up to PHP 2,500 annual accidental medical reimbursement *Up to PHP 50,000 accident coverage||As low as PHP 200 per month|
|Paramount Direct||Healthcare Cash Plan||*Up to PHP 4,000 daily cash benefit*Up to PHP 80,000 convalescence Benefit*Up to PHP 80,000 surgical benefits||Php 500 to PHP 4,000 per month|
|BDO||Home Insurance||* Burglary or robbery*Vandalism*Comprehensive personal liability*Up to PHP 5 million insurance coverage||PHP 760 to PHP 8,600 per year|
|AXA||Academic EXentials||*Educational benefits starting from PHP 124,000*Two choices for educational plan*Additional cash benefits||As low as PHP 1,500 per month|
|Malayan||Total One Protect||*Up to PHP 10, 000 for accidental death*Burial assistance*Medical expenses||As low as PHP 650 per year|
To have a more comprehensive breakdown of the coverage and premium costs for your family insurance, you may ask your insurance provider.
Types of Insurance for Families in the Philippines
Family Life Insurance
Life insurance pays a lump sum to the surviving family on the insured person's death or after a certain period. Below are three main types of life insurance in the Philippines.
- Term life insurance. Provides only death benefit payment for a fixed period ranging from one to 30 years. If the policyholder doesn't die within the term period, the coverage ends and the insured gets nothing. Being a pure life insurance, term life is one of the cheapest life insurance types in the Philippines.
- Whole life insurance. Provides lifelong coverage or until the insured is 100 years old, with a death benefit and an investment component. Because it earns dividends, the policyholder can borrow or withdraw cash, partially or fully, for any purpose. The premium stays the same throughout the duration of the insurance policy.
- Variable universal life insurance (VUL). Provides death, disability, and living benefits with an investment component. VUL insurance is quite similar to whole life insurance, except that the policyholder can choose to invest in various assets, including bonds, stocks, and money market funds.
Read more: What is VUL Insurance and Should You Get One?
Why Your Family Needs Life Insurance
If you have to prioritize one of the family insurance types, it has to be life insurance. It provides financial support to the loved ones you leave behind, especially if you're an OFW or the sole breadwinner of the family.
Financial experts recommend getting a life insurance plan that covers 10 times your annual income. This amount should be enough to cover funeral costs, replace lost income, pay the bills and other living expenses, pay off any debt, and fund your child's education.
Ideally, both you and your spouse—whether working or not—should get life insurance coverage so that when one dies, the other won't be burdened much raising the kids.
Read more: 3 Empowered Pinays Share Their Journey and Tips to Succeed as a Financial Advisor
Where to Get Life Insurance in the Philippines
Life insurance companies offer life insurance policies, the top ones being the following:
- Sun Life
- AXA Philippines
- Philam Life
- Pru Life UK
Make sure to deal only with a licensed insurance provider. Check the Insurance Commission website to see the top-performing life insurance firms in the Philippines.
Family Health Insurance
A health insurance plan for families (policyholder plus dependents) covers and reduces the cost of outpatient, inpatient, emergency, and preventive healthcare services.
Why Your Family Needs Health Insurance
Healthcare costs in the Philippines are expensive, and they keep on rising every year. Without health insurance, you might end up using all your savings and even borrow money to cover medical bills when you, your spouse, or one of your kids get sick.
Although employers typically provide health insurance for you and your dependents through a health maintenance organization or HMO, the coverage may be limited. Thus, your whole family can enjoy wider health coverage when you buy your own family health insurance plan.
Where to Get Health Insurance in the Philippines
You can get a health insurance plan for your family from life insurance companies and HMO providers, including the following:
- Pacific Cross.
Do you barely have the budget for monthly premium payments? Consider the more affordable option: getting a health card for each member of your family.
Critical Illness Insurance
Also called critical illness cover, this type of insurance pays a lump sum when the policyholder is diagnosed with any serious health condition covered in the policy. The money can be used to pay for treatment, medical bills, and recuperation aids. It even replaces lost income due to inability to earn money.
Critical illness coverage may include heart attack, stroke, diabetes, kidney failure, brain injury, Alzheimer’s disease, and cerebral palsy.
Why Your Family Needs Critical Illness Insurance
Suffering from a life-threatening disease in itself is a difficult experience not just for patients but also for their family. It can wipe out one's lifetime savings and drain the household budget. With a critical illness insurance policy, you and your family won't have to worry and stress over money, so you can focus on recovery.
If you have health insurance, critical illnesses are most likely excluded from the coverage. Get a critical illness cover, especially while you are young and have a family history of serious illnesses.
Where to Get Critical Illness Insurance in the Philippines
Life insurance companies in the Philippines offer critical illness cover as a stand-alone product or a rider attached to an insurance policy. If you already have a life insurance plan, talk to your agent about adding a critical illness rider to your policy.
Family Personal Accident Insurance
A personal accident insurance plan for families pays a cash benefit to beneficiaries when the policyholder or a co-insured immediate family member dies or becomes permanently disabled due to an accident.
For married policyholders, their spouse (aged 60 and below) and unmarried children (aged 19 and below) can get family accident insurance coverage.
Why Your Family Needs It Personal Accident Insurance
The expenses following an accident—such as medical and funeral costs—can quickly strain a family's income. Protect your loved ones from such a financial burden by getting a personal accident insurance policy that covers the entire family.
Where to Get Personal Accident Insurance in the Philippines
Insurance companies such as Sun Life, AXA Philippines, MAPFRE Insular, BPI/MS, and Commonwealth Insurance offer family personal accident insurance products in the Philippines.
An education insurance plan covers a child's college education costs. It works like life insurance but is tailored to help parents provide for their children's future educational needs.
Why Your Family Needs Education Insurance
Did you know that it will cost you two million pesos or more to finance a child's four-year college education 15 years from now?
Education could be the only legacy you'll leave your children behind. It's worth investing now in an education plan with a premium that fits your budget instead of borrowing money and drowning in debt as soon as your kids enter college.
Where to Get Education Insurance in the Philippines
Insurance providers in the Philippines such as Manulife, Sun Life, Philam Life, and AXA Philippines provide different educational plans to parents who want to prepare early for their children's education.
Car insurance protects you from financial losses resulting from a vehicle accident or theft. It covers expenses such as auto repair bills and medical expenses for injury or disability caused by an accident.
Why Your Family Needs Car Insurance
While car insurance seems less important than the other insurance types listed above, it's nonetheless crucial, especially if you have a car and often use it for traveling with your family and driving your kids to school.
Even if you drive alone, figuring in an accident can affect your family financially. When you're hospitalized after an accident and can't work for a long time, your spouse and children will have to adjust. If you have a car insurance policy, you won't have to worry about how your family will cope when you meet an accident on the road.
Where to Get Car Insurance in the Philippines
Around 70 companies provide car insurance in the Philippines. Rather than go directly to each car insurance provider, many car owners conveniently get their comprehensive car insurance plans through banks, dealerships, or online brokers like Moneymax.
Home insurance or property insurance provides financial protection for homeowners against loss or damage to their residential property due to a typhoon, flood, fire, earthquake, lightning, burglary, and robbery.
Some home insurance policies in the Philippines reimburse rent and relocation expenses, medical expenses for injuries resulting from an accident at home, and legal expenses for third-party legal liabilities (like when a neighbor's house gets damaged due to a fire from your home).
Why Your Family Needs Home Insurance
Your home is your most precious investment, as it provides shelter and security for your family. It can be emotionally and financially devastating for your loved ones to go through a disaster. It's less costly to pay for home insurance premiums than covering all the costs by yourself should it happen.
Where to Get Home Insurance in the Philippines
Insurance companies like Malayan Insurance, MAPFRE Insular, and AXA Philippines, as well as banks like BDO and BPI, provide home insurance.
Optional Family Insurance Types to Consider
Ensure better financial protection for your loved ones with these insurance types, whichever suit your family's needs.
Mortgage Redemption Insurance
When you apply for a housing loan from Pag-IBIG or a bank, the lender will require you to get a mortgage redemption insurance or MRI. MRI pays off a portion or the entire outstanding loan balance of policyholders on their death or total disability.
MRI shields your family from the burden of settling your remaining housing loan balance and getting buried in debt after your passing. Without it, the lender may repossess the house you've built for your family if they fail to pay off your loan.
If you have a term life insurance plan, you may assign it as your MRI. If none, you can include the MRI in your housing loan payment as a one-time premium paid every year.
Family Dental Insurance
A dental insurance plan for families is either included in a health insurance plan or offered as an optional benefit. It could also be included in your company's HMO, but the coverage is likely to be limited.
Typically, this insurance type covers annual oral prophylaxis, oral consultations and examinations, simple tooth extractions, and temporary fillings.
If you're planning to grow your family, getting a family dental insurance plan is worth the investment. It is affordable and helps you reduce your family's out-of-pocket dental care costs.
A travel insurance plan for families is a must-have if you regularly go on overseas vacations with your family. When you'll take your family on a trip around Europe, you'll be required to get travel insurance before you're issued a visa.
Even if you have life insurance, it won't protect you and your family when something happens while traveling abroad. With a family travel insurance plan, you and your loved ones are covered on medical emergencies and travel inconveniences (flight delays, lost baggage or travel documents, trip cancellation, etc.) that occur outside the Philippines.
You can buy a family travel insurance plan from banks and life insurance companies.
How to Choose the Right Family Insurance
Here are a few tips to consider when choosing the type of insurance to get for the whole family:
1. Identify your level of need
Make sure to get the type of insurance you actually need. If you are newlyweds, perhaps basic life insurance will suffice for now. You can increase your insurance coverage when you can afford more.
However, if you are looking to protect your spouse and kids, health and critical illness policies should be your priorities. This will help you finance any medical expenses you or a family member may incur in the future.
2. Determine premium costs
Your family insurance coverage depends on the premium—the amount you pay your insurer. The higher the premium, the more coverage and benefits your family gets. Figure out how much you can afford for the premiums by estimating your family’s monthly budget.
3. Manage your risks
Family insurance is about managing unexpected risks. So it’s best to get a policy that fits your risk level. For example, if you or a family member has a critical illness, you should take out an insurance policy that covers this. If you recently purchased a home and would like to protect this investment, home insurance is a good idea.
4. Compare policies
It isn’t the best idea to get the first family insurance plan you saw online. Do your research and compare different policies from various companies by looking at their coverage, premiums, and terms.
5. Beware of too-good-to-be-true plans
If you saw a good deal online, make sure it is from a registered insurance provider. Don’t be swayed by sky-high coverage with little premium costs. Chances are, these are too-good-to-be-true. To ensure you are getting family insurance from a legitimate provider, check if the company is registered with the Security Exchange Commission.
6. Read the fine print
You must read and understand your insurance policy before signing it. Check if you have to pay any fees such as taxes related to the insurance. The fine print may also help answer any questions you have.
7. Ask away
Don’t be afraid to ask your insurance provider if you have any concerns, especially if there are issues regarding your policy that you don’t understand. Insurance aims to protect you and your family, so you should know what it involves and how it can help your family in the long run.
Family insurance can give you peace of mind, knowing you and your loved ones are protected. You don't have to get all types of insurance at once. You can start prioritizing the critical ones, like health insurance and life insurance with personal accident and critical illness riders. Then eventually, get another insurance type at a time as soon as your budget allows it.
-  2019 Life Statistics
-  CHOosing Interventions that are Cost Effective (WHO-CHOICE)
-  The value of critical illness insurance (Chua, Rappler, 2014)