5 Pointers When Getting A Life Insurance Policy

May 10, 2011 | By Garry De Castro | Filed in: Insurance.

Everyday, I’ve been meeting and talking to different kinds of people on matters or money. People from all walks of life, young and old, thick and thin, small and big, middle class and rich, professionals and blue collar jobs. You name it, most likely I’ve conversed with them one way or the other.

And most of the time, they have issues like what age is the best time to get a life insurance? What are the advantages if I pay using annual mode? What is irrevocable or revocable beneficiary?

So I thought it would be nice if I make some sort of summary for all of these insurance issues. Let me call it 5 pointers when getting a life insurance policy.

Sun Life Insurance

  • Age
    – One that greatly affects the cost of insurance is age. The older one gets, the higher the premium (payment) gets. So it is always best to get insurance as early as you can. Also, the younger the insured person is, the longer investment time is on his side. Thus, the bigger his fund value gets.
  • Health
    – As they always say, Insurance is very cheap when you don’t need it and very expensive when the time comes that you actually need one (but you don’t have one yet). At middle 20’s, how can one think of illnesses, death and retirement. I’d say 99% are still focused on what gadget to buy or which place to travel. But when one reaches the age of 50 and starts getting symptoms of diabetes, hypertension or any related diseases, (eventhough he has a lot of money) that’s the time he wishes he should have bought insurance (when he was a lot more healthier). However, chances are, he will be declined because of his pre-existing conditions. It actually happens in real life, trust me.Just like age, it is always best to get life insurance as early as you can and as healthy as you can.
  • Payment (Mode of Payment)
    – Sun Life Financial insurance policies have 3 of mode of payment to choose from (for regular pay plans); Annual, Semi-Annual and Quarterly.After 2-3 years of my existence with Sun Life, I found out that those who opted for annual payments have bigger fund value (VUL Plans) than those who stick to quarterly and semi-annual mode.
    Also, most of the policies that lapse are usually on quarterly mode.I’m not saying that you need to get insurance only when you have money to pay for annual mode. You can still start on a quarterly mode. Just that, when the time comes that you have the capacity to pay for the annual (in case of bonuses), change gear to semi-annual or annual. Idea is, the earlier the money is invested, the bigger the potential to earn more.
  • Revocable or Irrevocable (on beneficiaries)
    – By definition, revocable means the ability of a policy owner either to change who will receive the compensation from his or her policy or to terminate the policy without having to get consent from the current beneficiary. Irrevocable is the opposite. The policy owner needs the consent (in signature) of the beneficiary to change or modify.However, with revocable, when the insured dies, the death benefit becomes part of his estate, thus is taxable. With irrevocable, death benefit is tax free.
  • Insurance Advisor
    – Choose an Insurance Advisor / Agent that is Trustworthy. Someone that is worth your trust for your money.  I’ve heard too many stories of insurance agents that collects from policy holders and do not remit the money to the head office. Alway ask for receipts (usually they give Provisional Receipts).Choose an insurance advisor that you can always communicate with. Someone that informs you about the latest happening or latest product offering of the company. You wouldn’t want to be left behind. Also, if you can ask for a yearly review of your policy, that should be the way to go.

Should you have a question regarding your existing Life Insurance policy or want to check what  Sun Life Financials can give you, you can get in touch with me either by posting a comment below or contact me using the following details:

YM – gigabytes27
M – 0922 897 8977 / 09164147400
E – garryzaldy.s.decastro [at] sunlife.com.ph
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Garry Zaldy de Castro is an advocate, Financial Advisor, Certified Investment Solicitor (Mutual Fund Representative), blogger, IT practitioner, husband to Aileen and a dad to Jacob and JohnD. He started Financial Planning Philippines in 2008 just to share his financial learning to friends, relatives and anyone who wishes to be financially independent.

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  • imdaughterofi’am

    Sir Garry, dun po sa irrevocable (beneficiaries), what if namatay yung beneficiary, puede bang magchange ng beneficiary? 

    • Yes, you may still change irrevocable beneficiaries, you just need to present a death certificate of the (deceased) beneficiary.

  • Jaypmargallo

    Sir Gary, kung skaling mamatay na ung insured person on the first month pa lng ng policy nya, makukuha pa ba ng beneficiaries yung buong sum assured khit 1 month pa lng ng premium na naibabayad nya?

    • Yes, definitely. Altho this will take 2-3months bago marelease since it will be under investigation. Idea is if death occurs 2 years and below, we call that contestability period, meaning to say that death will be investigated. 

      If death occurs after 2 years of the policy, even suicide will be paid without further investigation.

      Just a recent experience by a colleague (Sun Life Advisor) – client got the policy in 2007. For some unfortunate events, maagang pinauwi ni Lord. Claim (death certificate & other requirements) was submitted Friday afternoon (July 6, 2012). Monday afternoon (July 9, 2012), he was able to deliver the cheque amounting 1 Million to the beneficiaries.