A Beginner’s Guide on Insurance Plans – Things You Should Know Before Buying One

Are you in the market for an insurance plan but don’t know where to start? You’re not alone. Buying insurance can be confusing, especially if it’s your first time. One of the most important decisions a person can make is choosing the right insurance plan.

There are many different plans and factors to consider that it’s overwhelming how to get started. This blog post will break down the basics for you and provide the types of insurance available.

So whether you’re new to insurance or just looking for a refresher, read on for everything you need to know. Keep in mind that this is just a general overview – always consult with an insurance agent before making any decisions about your coverage.

Contents

What is an insurance plan?
What are the types of insurance?
Life insurance plans – should you get one?
Health insurance plans – how should you choose one?
Travel insurance plans – do you really need one?
Top 5 insurance companies in the Philippines
Final thoughts

What is an insurance plan?

An insurance plan is a contract between you and an insurance company that promises financial protection against unforeseen circumstances.

Suppose something catastrophic happens, such as your house catching fire or your vehicle being destroyed in an accident. In that case, the insurance provider will pay for all or part of the losses under your policy.

In case of death or sickness, your insurance plan can provide money to help cover medical expenses, funeral costs, or financial support for your family.

What are the types of insurance?

There’s not only one or two insurance you can buy. There are life insurance and non-life insurance that Filipinos need to know.

• Life Insurance – it’s an insurance policy for someone who has a family that depends on him or her. It’s essentially an agreement between the insured and the life insurance firm that they will give money to your loved ones if you die.
• Health Insurance – with the uncertainty of calamities and sickness, this insurance ensures that the firm will cover the medical costs. If you don’t already have one, you need to be employed by a company that provides it. Otherwise, you may purchase one for yourself by speaking with multiple insurance agents who offer health insurance plans.
• Property Insurance – if you want to protect your home or land from calamities, this is the best option for you since it protects what happens to your property, such as theft or fire damage.
• Personal Accident Insurance – if you always go out and do risky things like climbing mountains, hang gliding, or doing river rafting, then this is the insurance for you. It will cover accidents that may happen while you’re having fun.
• Auto Insurance – if you want to insure your car, this type of insurance plan will surely help because it covers any damages that may happen to your car just by driving it. It will also pay for costs if there’s an accident.
• Travel Insurance – this type of insurance covers medical emergencies and lost items while traveling. It also comes with coverage for trip delays, baggage loss, and accidents during your travels.

Life insurance plans in the Philippines – should you get one?

There are two popular varieties of life insurance: term life and whole life. Term life insurance provides coverage for a limited time, and it offers temporary protection at low costs since there’s no need to take care of investments or savings. You can think of it as a temporary substitute for whole life insurance.

Term life insurance protects your family against the financial impact of your death but doesn’t protect them against the costs associated with your passing. Meanwhile, whole life insurance protects an individual’s entire lifetime and beyond due to its investment component.

Typically, you will pay more than you would with term life insurance because part of your premium goes towards investments and savings. Your policy may also accumulate cash value over time – sort of like a retirement plan where you get back what you paid in plus growth.

The primary reason why people buy life insurance is that they want to ensure that their loved ones will be provided for even if something happens to them. This is important as it allows your beneficiaries to maintain financial stability and avoid facing significant problems following your death, such as bankruptcy.

Another reason is that if the life insurance is a link-investment plan, a kind of insurance where the company invests a portion of your premium in growing your money, you can use the money after some time for your spending such as a new house, paying debts, family vacation, or build a business. However, there are also risks involved in this type of plan.

Health insurance plans in the Philippines – how should you choose one?

Health insurance plans come in different types with varying coverage and premium rates. It’s up to you to determine what will work best for your needs as certain factors might affect it, such as age, gender, and the current state of the medical condition.

First, you should know that all health plans cover hospitalization and surgery, so if you need to be insured in outpatient care, consider getting a particular type of policy. Since most policies cover both, you don’t have to worry about choosing between medical and surgical expenses.

It may also depend on whether or not your chosen plan has a Health Maintenance Organization (HMO) because you can only visit accredited doctors according to their fine print.

You can also check the hospital cash benefit you will get if you get hospitalized and other coverage the plan offers. Some insurance companies offer a mix of life and health insurance in one policy, but you have to pay more for your insurance premiums.

Travel insurance plans – do you really need one?

For Filipinos who travel frequently, travel insurance is a must-have. You will never know what would happen to you if you get stuck in an airport overseas.

Travel insurance plans also cover inconveniences during flights, such as missed trips due to delayed flights or lost baggage which comes in useful if your flight gets canceled. Having one is essential since it covers medical bills and hospitalization if you are injured or fall sick while traveling.

If you end up staying longer than expected because of poor weather conditions or natural disasters that hit the place where you’re supposed to visit, all these will be covered by your policy, too.

Some credit cards in the Philippines offer travel insurance with coverage up to P20 million such as EastWest Platinum Mastercard, most of which cover basic coverage. If you travel six or eight times a year, it’s best to get an annual premium of travel insurance so you can maximize the insurance coverage. However, you can also purchase comprehensive travel insurance plans from companies such as AXA.

For example, you can either get a single or annual multi-trip coverage that includes personal accident insurance, 24/7 emergency assistance, protection on personal luggage, and comprehensive medical benefits.

Top 5 insurance companies in the Philippines

Several insurance companies in the Philippines can be daunting to review each company profile, accomplishments, financial stability, and more. But our list would help you a lot since you would have heard these insurance companies – and until now, they’re still here.

• SunLife of Canada – a Canadian company that offers life and health insurance plans in the Philippines. They have been in operations for 103 years, which means they’re financially stable, have award-winning customer service, and currently employs thousands of Filipino employees.
• AIA Philam Life – a company that offers life, health, and property insurance policies. AIA Philam Life has been in the industry since 1947, and it’s one of the largest insurance companies in the Philippines. The company owns the 14th tallest building located along Paseo De Roxas Avenue in Makati City.
• Pru Life Insurance Corp. of the U.K. – a premier provider of financial solutions, is now part of one of the largest insurance groups in the world – Prudential Financial. Pru Life has millions of customers and provides life, health, and pension insurance products.
• Philippine AXA Life Insurance, Corp. – a leading provider of life insurance and financial protection products in the Philippines. It has more than 800,000 customers through individual and group life insurance products.
• FWD Life Insurance Corporation – a subsidiary of FWD Group, is one of the leading life insurance companies in the Philippines. The company offers life and health insurance products, general insurance, and employee benefits.

Final thoughts

That was a lot of information to digest! Let’s quickly recap what we learned about insurance plans. First, an insurance plan is a contract between you and the insurer in which you agree to pay premiums in exchange for coverage in case of certain events.

Different insurance policies cover life, health, travel, etc. How do you choose the right one? Well, it depends on your needs. Do some research and compare quotes before making a decision.

And finally, don’t forget to shop around – many insurers are competing to find the best deal for you. It’s best to inquire about proposals and coverage before committing to an insurance company.

We hope that this article has shed light on insurance plans. Which type of insurance do you think you should buy these days? Let us know in the comments below.