Starting a Family? Consider These 10 Insurance Types

Published: November 21, 2018 | Updated: April 8, 2020 | Posted by: Venus Zoleta | Personal Finance

insurance types for families Philippines

“Seriously, 10 insurance types?!” 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. Is 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 types 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.

Make sure to cover all bases when it comes to your family’s financial well-being. Consider these insurance types when you’re starting a family. Understand each type to decide which ones suit your family’s needs best.

Life Insurance

What is Life Insurance?

Life insurance pays a lump sum to the surviving family on the insured person’s death or after a certain period.

Life Insurance Types

Three main types of life insurance in the Philippines are available to choose from: term life, whole life, and VUL.

  • 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.

Why Your Family Needs It

If you have to prioritize one of the insurance types to protect your family, 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—get life insurance coverage so that when one dies, the other won’t be burdened much raising the kids.

Where to Get Life Insurance

Life insurance companies offer life insurance policies, the top ones being Sun Life, AXA Philippines, Manulife, Philam Life, and 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.
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Family Health Insurance

health insurance coverage

What is 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 It

Healthcare costs in the Philippines are expensive, and they keep on rising every year. Without health insurance, you’ll use up all your savings and even borrow money to cover medical bills when you, your spouse, or one of your kids get sick.

Although your employer provides health insurance for you and your dependents through a health maintenance organization (HMO), its coverage may be limited. Thus, your whole family can enjoy wider health coverage when you buy your own health insurance plan.

Where to Get Health Insurance

You can get a health insurance plan for your family from life insurance companies and HMOs such as Maxicare, MediCard, ValuCare, PhilCare, and 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. Check and compare different health cards here.

Critical Illness Insurance

critical illness insurance

What is 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 It

Suffering from a life-threatening disease in itself is a difficult experience not just for patients but also 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

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

personal accident insurance

What is 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

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

Insurance companies such as Sun Life, AXA Philippines, MAPFRE Insular, BPI/MS, and Commonwealth Insurance offer family personal accident insurance products in the Philippines.

Education Insurance

education insurance plan

What is Education Insurance?

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 It

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

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. Check this article to know some of your options for education plans in the Philippines.

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Home Insurance

home insurance

What is Home Insurance?

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 It

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

Insurance companies like Malayan Insurance, MAPFRE Insular, and AXA Philippines, as well as banks like BDO and BPI, provide home insurance.

Car Insurance

car insurance insurance plan for families

What is Car Insurance?

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 It

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

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. Read this article to know the pros and cons of each car insurance intermediary in the Philippines.
comprehensive car insurance philippines

Optional Insurance Types to Consider for Your Family

Ensure better financial protection for your loved ones with these insurance types, whichever suit your family’s needs.

Family Dental Insurance

dental insurance
A dental insurance plan for families is either included in a health insurance plan or offered 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.

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 (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 Travel Insurance

family travel insurance
A travel insurance plan for families is a must-have if you regularly go on overseas vacation 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.

Final Thoughts

You don’t have to get the insurance types all at once. To manage your budget, 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.