Expat’s Guide: Applying for Life Insurance

Planning for your future means covering all bases, even ones that you’d rather not think about just yet.
applying life insurance in philippines
Credit to Sourav Sarkar from Flickr.com

Living in a foreign land makes everything seem more uncertain, which is why you need something to lean on – something that will give you peace of mind that, should the worst happen, people you leave behind will not be left with nothing.

A solid life insurance policy can give you this sense of security and more. Getting life insurance in the Philippines is a straightforward process. All you need to do is pick an insurance company and let a financial advisor guide you every step of the way with the signature Filipino warmth and hospitality.

 

Top 5 Insurance Companies

Based on 2017 premium earnings, here are the insurance companies that people put their trust in:

  1. Sun Life Financial Philippines
  2. AXA Philippines
  3. BPI PhilAm Life Insurance and Bancassurance
  4. Philam Life Insurance
  5. Pru Life UK

 

Before You Apply

 

Know your options

Life insurance has come a long way. When before, these policies were basically something you can’t enjoy when you’re alive, modern life insurance have evolved into attractive investment vehicles that you can lean on to see you through important life milestones and difficult financial moments.

Here are the 3 main kinds of life insurance:

1) Term Life Insurance

This is the type of insurance that expires after a specific period. Depending on your chosen plan, the “term” can be 1, 5, 10 so years, after which the policy expires. Term life insurance is the most affordable choice.

If you’re still alive when that happens, your family will not receive a payout upon your death anymore. No need to worry though because this is renewable and convertible to the other types.

2) Whole Life Insurance

This is the type of insurance that only expires when you do, which means premium payments could last longer. The beneficiaries you nominated upon application (which can be changed later on) will get the insured amount plus other rider benefits when you pass away.

3) Variable Life Insurance

This is the type of insurance that is the most expensive but also the most versatile. It’s the type wherein part of your premium payments will be set aside for investments in stocks, bonds, and other assets after a year or so, depending on your plan.

The premium payments can last 15-30 years, after which you may be able to enjoy yearly dividends from earnings of the investment component, or one lump sum, depending on your policy’s design.

 

Set your goal

What are you saving for? Do you simply want an assurance for your life? Or are you looking to save for retirement, a car or house, your child’s college education, or just build wealth?

Life insurance can include different riders that protect you against curveballs that life might throw your way like serious illness, job loss, disability, among others. There are more fun riders as well to help you save for your dreams and passions.

 

Set your budget

How much of your current income can you dedicate to premium payments? This will depend on the amount you want to get at the end of your policy’s term. Try to figure out how much you’ll need at the end of the policy’s term (assess your incomes and factor in debts and inflation) to get to this number.

If you’re starting young, compound interest will be your best friend so small payments will go a long way. However, if you realized the necessity of life insurance later in life, you’d have to dedicate as much of your income as you can to reach your target sum.

 

How to Apply for Life Insurance: Step-by-Step

 

Prepare necessary documents
  • Current valid passport and a clear copy of the same
  • Alien Certificate of Registration (ACR) i-Card or
  • Alien Employment Permit (AEP) or
  • Special Resident Retiree’s Visa (SRRV) ID
  • Tax Identification Number (TIN)

 

Choose your life insurance company

While all insurance companies offer pretty much the same products, each has a signature blend of add-ons that makes theirs unique. Choose one that fits your goals.

 

Get a financial advisor!

You can go to your chosen company’s office or website to ask for a financial advisor, but it’s actually better to ask friends for referrals because they’re likely to treat you better due to the personal connection.

 

Complete risk assessment form

This is only applicable if you’re getting the variable type that has an investment aspect. To determine what type of fund your plan will put part of your premium into, your financial advisor will ask you to fill out a risk assessment form before giving you plan proposals.

 

Choose a plan

Term, whole life, or variable? Choose which one suits both your budget and needs.

 

Fill out application form

Your financial advisor will help you fill out the application form along with others that as for more details like your beneficiaries, your family health history, etc. On top of that, foreign nationals are also required to fill out a background residential form.

 

Provide medical records (if necessary)

Most life insurance policies today have health and hospitalization riders that cover major illnesses.

In case you specified some sort of pre-existing condition when filling out the application form, especially if it’s one of the illnesses covered, your financial advisor may ask you to provide records pertaining to the treatment of that condition. Really good financial advisors will even go to the hospital or clinics with you to retrieve them!

 

Set a payment method

You can pay via cheque, bank account auto-deduction, or credit card. You can set the frequency to monthly, quarterly, bi-annually, or annually.

 

Receive documents

At this stage, all you need to do is sit back and wait for your financial advisor to process your papers. He or she will either set up another meeting or simply ship you the documents.

 

Pay monthly or yearly or whenever

Don’t forget to pay on your designated dates! You can sign up for auto alerts via email or SMS to remind you of the due date.

 

It’s always better to be overly prepared than be caught by surprise by life’s ups and downs. Applying for life insurance in the Philippines is relatively easy and will provide you with a solid assurance for your and your family’s future.

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