Saturday, May 16, 2020

Insurance Is Just An Expense, Do You Agree? 🙊

For us ordinary people who just earn a decent income for our daily needs, we see insurance as an expense.

"Dagdag sa gastusin."

"Di ko naman gagamitin 'yan."

"Malusog naman ako."

"Wala na akong pera para diyan."

"May iba akong gustong pag-ukulan ng pera ko."

"May binabayaran pa akong credit card (could be dahil bumili ka ng sapatos, damit, cellphone, bag, etc.)"

But imagine this, if you are the breadwinner of the family and suddenly *knock on wood* you lost your life, what will happen to your family?

Saan sila kukuha ng pambili nila sa pang-araw araw? Sino na ang bahala sa kanila? Kung may kamag-anak kayong tutulong sa kanila, eh paano na yung pamburol mo? Sino ang gagastos?

Even if you are not the breadwinner of the family, let's just say you are a contributor to the family.

Meaning may mga sinasagot kang gastusin sa bahay like kuryente, o kaya groceries, o kaya telephone and internet subscription, o minsan nag-aabot ka rin ng panggastos nila. What if *knock on wood ulit* you lost your life? What will happen to your family?

Probably you will think na kaya naman nilang punan or kunin sa iba yung cinocontribute mo, so hindi problema iyon. But what about yung pambayad sa funeral services para sa'yo? Sila pa ang sasagot?

Even if you did not lose your life, what if you got into an accident and you were hospitalized? Or got critically ill?

Hindi ka na nga nakakapagcontribute, sila pa ang hahanap ng pambayad sa hospital bills mo or sa pagpapagamot mo.

The worst feeling maliban sa maramdaman mo na hindi ka mahal ng mahal mo, is yung feeling na maging burden ka sa family mo dahil sa mga unforeseen events na ito.

Wala kang magawa. Wala kang maitulong. Feeling mo wala kang silbi.

Sa isang iglap nawalan ka ng pangkabuhayan. At ang masaklap pa, wala ka na ngang source of income dahil sa nangyari sa'yo, saka pa magdadatingan yung mga maniningil sa'yo o yung mga bayarin mo. Mag-uunahan pa 'yan para hindi sila maubusan.

But what if there is a solution to this scenario na kahit mangyari ang kahit alin sa unfortunate event na iyon sa iyo ay wala kang poproblemahin?

Habang naghahabol yung mga maniningil sa iyo, may isang taong sasalo ng lahat ng iyon para sa iyo, siya na ang bahala magprocess sa lahat habang ikaw ay nagpapagaling or namahinga na.

Sino iyon?

Iyon yung na-prejudge na natin as an expense.

If you have your insurance, ito na ang bahala sa iyo kapag nangyari ang isa sa unwanted event na iyon.

Or even if walang nangyari ni isa sa mga iyon sa iyo at umabot ka ng 100 years old, aba may reward ka pa galing sa insurance mo.

We just see it negatively maybe because ang nasa isip natin is pineperahan lang tayo nung insurance agent na nag-aapproach sa iyo or habol lang niya is commission sa iyo.

But your insurance is not for that agent's benefit, but yours.

Kung titingnan lang sana natin ang insurance as not for the company's or the agent's benefit but rather eh yung benefits na makukuha mo, you will see kung gaano ang maitutulong nito sa iyo at mararamdaman mong hindi ka mag-isa sa panahong kailangan mo ng tulong ng iba dahil yung taong ang tingin mo noon eh "mukhang commission" ay iyon pa ang lalapit sa'yo para iabot sa iyo ang benefits ng insurance na kinuha mo.

Sa panahon ng kasaganahan mo, you see it as an expense, mas prefer mong unahin ang wants mo.

But if you think about the benefits it will give you in the future, na sana ngayon pa lang ay marealize mo na bago pa mahuli ang lahat, you will wish na sana dito mo na lang inilaan yung pinangkain mo sa Samgyup or pinambili ng cellphone.

Though I am not saying na huwag ka ng kumain ng Samgyup o bumili ng cellphone dahil actually you can still do it while setting a portion of your income for your future.

That is what a Financial Advisor does.

FAs do not restrict people on how they will use their hard-earned income but will help them maximize it instead.

Mas gusto mo bang dumadaan lang sa palad mo yung pinagtrabahuhan mong suweldo ng hindi man lang namamalayan kung saan napupunta?

Or mas better yung nakikita mo yung pinatutunguhan nito at nakikita mong lumalago?

But don't misinterpret the word "lumalago" as a get-rich-quick scheme because this is not like that.

This is in preparation for your future so hindi ito panandalian lang tulad ng ex mo.

Para itong Motolite instead, Pangmatagalan.

This takes time and discipline para lumago.

While other people are lavishly spending in the present and not preparing for their future, you can be one of the few who thinks ahead na nagtatabi na para sa future mo while still enjoying your present.

You might think na "ah, magtatabi lang pala, edi ilagay ko na lang sa bangko o kaya sa stocks o kaya sa kung saan pa man."

But the difference of insurance is, hindi ka lang nagtatabi, naglalagay ka pa ng protection mo in case one of the unwanted events happens to you.

In a nutshell, insurance is protection.

Magtatabi ka regularly ng portion ng income mo para sa iyong insurance, then come a time na may mangyari sa iyo, maaksidente, magkasakit o mawalan ng buhay, insurance mo na ang bahala sa iyo.

Protection in case maaksidente ka dahil makakatanggap ka ng para sa pagpapagaling mo.

Protection in case magkasakit ka dahil makakatanggap ka ng para sa pagpapagamot mo.

Protection in case mawalan ka ng buhay dahil makakatanggap ang naiwan mo ng para sa eternal rest mo.

Protection mo rin in case humaba ang buhay mo dahil kapag nareach ng insurance policy mo ang maturity ay makukuha mo yung maturity benefits nito.

Oh diba? Kahit aling scenario doon ay win-win ka pa rin?

May cash surrender value din kung sakaling iterminate mo na yung policy mo before ng maturity.

Kapag yung portion ba ng income mo inilagay mo lang sa wants mo, kaya ka bang protektahan ng wants mo na iyon sa mga scenario na inihalimbawa ko?

Sabi nga ni Scott Pape ng Barefoot Investor, ang budgeting rule daw is 60-20-20.

60% of your income is on living expenses – rent/mortgage, groceries, utilities and transportation
20% of your income on financial goals – debt reduction, emergency fund, and investments
20% of your income on discretionary spending – entertainment, travel and eating out

Siyempre example lang iyan ng expenses na pwede mong paglaanan, depende pa rin iyan sa lifestyle ng bawat tao kung ano ang pinagkakagastusan nila.

At siyempre magkakaiba tayo ng range ng income at expenses so baka magkakaiba rin tayo ng percentage sa pagbubudget ng income natin but you get the point on the budgeting rule, divide your income between your living expenses, financial goals and discretionary spending.

You can customize it as you see fit.

But if we try the budgeting rule and apply it below, let us see how much of your income should go to your respective budgets.

Your monthly take-home income:













Whatever the amount you see under the Financial Goals, should go (according to the budgeting rule) to debt reduction, emergency fund, and investments. If you do not have debts, then you can freely allot it to your emergency fund and investments. If you have debts, sana hindi ito yung utang sa credit card para sa luho, because that still falls under entertainment expenses in discretionary spending, but rather debts in relation to your needs like a housing loan etc.

Your insurance falls under Financial Goals as well which is actually a good description of an emergency fund + investment. That is kung ang emergency rin na naiisip mo is like health emergency or yung mga unforeseen events which are usually covered ng insurance plans (will depend on the policy you will get).

But if ang "emergency" na naiisip mong pag-allot-an is for "biglaang gala" or "biglaang bili ng wants", then that should fall to the "Discretionary Spending" fund.

Ang pre-conceived din about insurance is mahal siya or para lang sa mga mayayaman, but hindi lang naman kasi income ang pinagbabasehan ng quotation ng insurance mo kundi yung age mo at health status mo.

Kung mas bata ka at wala pang sakit, insurance is affordable dahil low-risk ka so it is better to invest in it as early as now para hindi mo na poproblemahin pagtanda mo.

The more na tumatanda kasi ang tao ay mas tumataas yung risk sa mga sakit at mas tumataas yung insurance premium mo or ang worst is madecline ka na sa application kung may sakit ka na. Pero bakit mo pa yun hihintayin 'di ba? Take the opportunity habang bata bata ka pa at malakas pa para kumayod, doon ka magtabi ng para sa protection mo.

A sample of an insurance policy that I will apply to myself too is the AIA Critical Protect 100 which is an income-protection against critical illnesses.

It is a 10 or 20-year pay policy. Mukhang matagal kung iisipin mong 20 years mong babayaran, but when do you even plan to retire?

The mandatory age of retirement is 65.

If you are at your 20s at the moment ay matatapos mo nang bayaran ang policy mo at age 40s or even at 30s if you choose to pay at 10 years.

This plan includes Life insurance coverage of P1M until age 100 or Major Critical illness and Minor Critical Illness coverage of P1M until age 100 for 100 Major/Minor Critical Illnesses, Gender-Specific Cancer Benefit, Recovery Benefit, Philam Vitality (this is a very broad subject and couldn't emphasize it more on how this will impact your life) and Cash Surrender Value.

And these are guaranteed, except for the Philam Vitality benefits: cash rewards or its equivalent, which will depend on your health performance like the physical exercise that you do, etc, to make you live healthier, longer, and better.

On top of the coverage boost that Philam Vitality gives, you are also entitled to rewards with PhP200.00 in money equivalent upon initial use and PhP200.00 per week or PhP10,400.00 per annum for every time you meet the target exercise.

But! Disclaimer though: The cost of the insurance is dependent upon the age of the client. The younger you are, the cheaper the cost of the insurance is. The coverage and cost can be adjusted according to your goals.

Kung may hindi ka rin man nakita dito sa inexample kong ACP100 plan ay mayroon din yung mas kumpleto: AIA All in One.

As the name suggests, this plan is high in protection.

It includes Life insurance benefit/maturity benefit P1M, Total and Permanent disability coverage (or in layman's term is the "baldado" coverage) P1M, Personal Accident coverage P1M, 10 Critical illness coverage P1M, Waiver of premium, Philam Vitality and Cash Surrender Value.

If I continue to discuss everything here further, it will surely be lengthy at mas maigi sigurong ang ipakita ko sa iyo ay yung figures na mag-apply mismo sa iyo.

At dahil tumi-techy techy na tayo ngayon at dahil na rin sa pandemic na kinakaharap natin ngayon, hindi na natin kailangan magmeet in person para lang maipakita ito sa'yo.

Pwede mong makita ang figures na mag-apply sa'yo via Zoom or other means and we can adjust the plan according to your needs. Sa Mobile Legends ka madalas makakakita ng hirap mag-adjust pero dito we gotchu. 😃

Medyo humahabol pa lang ang blog ko sa technology so you can contact me muna via email.

You can see on the right side of the screen the "Contact me here" form where you can easily reach out.

Things to note though to be eligible for an insurance plan are:
1. No pre-existing condition
2. Must be within the Philippines when signing the contract

Let us live healthy, well, and safe! And protect our future~!

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