Let’s dive into the numerous insurance options available! Oftentimes, we might hear about VUL, or whole life insurance. But there are also a lot of people who prefer to buy term insurance instead.
Term insurance is a type of life insurance plan that provides the client with coverage only for a specific period, aka "term." Various companies offer various terms, such as 5, 10, or 20 years. The beneficiary receives the death benefit when the policy owner passes away within the specified term. Traditional term insurance typically does not provide payouts or returns of premiums when an insured person survives beyond the agreed-upon term.
What are the Key Features of Term Insurance?
Fixed Term: The policy covers the insured for a predetermined period. Some term insurance plans also allow people to renew and extend their term insurance for another fixed period.
Renewability: Some term insurances offer the option to renew at the end of the term, though the premiums may increase based on the policyholder’s age at renewal.
Lower Premiums: You can compare term insurance to VULs or whole life insurance plans, and term insurance may still come out more affordable.
No Cash Earnings: Unlike whole life or VUL insurance, term insurance does not accumulate any cash value or savings. This may also be part of the reason it is cheaper.
Why is term insurance worth your money? Is it Sulit?
Temporary Money Needs: It's ideal for covering temporary financial emergencies, like the death of the breadwinner.
Budget Constraints: Term insurance is a good choice for people who like relatively larger insurance coverage but have a limited budget at the moment.
Term insurance is often the top choice because it is simple, affordable, and can provide higher coverage during periods when it is needed most.
What is Buy Term Invest the Difference (BTID)?
BTID means that one can simply buy term insurance for its coverage and invest their remaining budget to direct investments such as businesses, stocks, REITs, etc. Some Filipinos may be insistent on term insurance only for the "Buy Term, Invest the Difference" (BTID) strategy for several reasons:
Affordability:
Term insurance is generally more affordable than whole life insurance, or VUL.
Flexibility in Investments:
BTID offers more control over how the "difference" (money saved from buying cheaper term insurance) is invested. Some may prefer investment activities that align with their financial goals, such as stocks, real estate, or mutual funds.
Cultural Perception of Insurance:
There might be a cultural preference for viewing insurance primarily as a safety net rather than an investment. This mindset aligns with the strategy of BTID, where insurance is seen as protection and investments are handled separately.
When is Term Insurance Beneficial?
Between Jobs: If you’ve recently resigned or are jumping between jobs, term insurance may be a beneficial addition to your portfolio while waiting for new employer-sponsored insurance.
Unexpected Life Changes: If you're experiencing a life event, such as being newly married, having a new kid, moving houses, etc., having cheaper life insurance can be a beneficial safety net so you will not have to worry about your coverage.
Cost-conscious Individuals: For those who need affordable, short-term protection and are willing to accept limited benefits.
Potential Disadvantage of Term Insurance:
Exclusion of Pre-existing Conditions: This is applicable to term health insurance plans. Many term health insurance policies do not cover pre-existing conditions.
Limited Duration: Since these plans are meant to be temporary, they aren't a long-term solution for ongoing health coverage needs.
No Cash Earnings: For some people who got term insurance long ago and have forgotten the features of their plans, they may be surprised to see that they will not get anything once the plan has reached the end of its term.
But worry less! Below are some insurance plans that can help you address your current needs. Some may even help you address one of the drawbacks listed above.
Read also: Money Activities You Can do All Year Long
Kinds of term insurance plans
Sun StartUp
This is a 10-year-to-pay, non-participating life insurance plan. It protects you for 10 years, with 100% of the face amount. If you outlive that period, then you receive a portion (50%) of your payments.
This is good for people looking for short-term insurance coverage with money-back features.
How much is this insurance?
Sample rate for Age 29, female, non-smoker with Php 500,000 life insurance coverage for Sun StartUp is Php 2832.5/quarter or Php 10,300/year.
Sun LifeAssure
Sun LifeAssure is a 5-year renewable-term health insurance plan. It provides financial benefits as long as the client’s critical illness is within the listed critical illness conditions or if they pass away during the period of coverage (whichever comes first). It is renewable every 5 years until age 70. Just remember that once you renew, the premium will increase based on your attained age upon renewal.
The illnesses covered are:
Amyotrophic Lateral Sclerosis (ALS)
Alzheimer’s Disease
Aplastic Anaemia
Bacterial Meningitis
Benign Brain Tumor
Cancer
Cerebral Metastasis
Coma
Deafness
Dissecting Aortic Aneurysm
Encephalitis
End Stage Liver Failure
End Stage Lung Disease
Fulminant Hepatitis
Guillain-Barre Syndrome
Heart Attack
Kidney Failure
Loss of Limbs
Loss of Speech
Major Burns
Major Head Trauma
Medullary Cystic Disease
Meningeal Tuberculosis
Motor Neurone Disease
Multiple Sclerosis
Paralysis
Parkinson’s Disease
Progressive Bulbar Palsy (PBP)
Progressive Muscular Atrophy
Stroke
Terminal Illness
Total Blindness
Critical illnesses requiring surgery
Coronary Artery Bypass Surgery
Major Organ Transplant
Replacement of Heart Valve
Surgery for Disease of the Aorta (Aortic Surgery)
How much is this insurance?
Sample rate for Age 29, female, non-smoker with Php 500,000 life insurance coverage for Sun LifeAssure is Php 1,127.5/quarter or Php 4,100/year. Rate will increase when renewed after 5 years.
Sun Maiden Plus
Sun Maiden Plus is a non-participating, 5-year renewable term health insurance plan that aims to help you financially prepare for any of the covered female-specific critical illnesses or surgeries. It offers health and wellness benefits, maternity benefits, and financial protection from any of the covered critical illness conditions and untimely passing.
This is renewable term insurance useful until age 65, with premiums increasing every 5 years based on attained age.
It provides financial assistance equal to a percentage of the face amount, which can help you with expenses related to treatment and/or recovery from a serious illness. The plan also provides life insurance protection equal to 100% of the face amount.
Within the first 10 years of coverage, clients can receive a total of five free diagnostics of preventative procedures. You can use this benefit once per policy year following your first policy anniversary. You can select a diagnostic procedure from the list below and have it performed at the medical clinics designated by Sun Life.
CA 125 (Ovarian Cancer)
Pap Smear and Pelvic Ultrasound
Pap Smear and Breast Ultrasound
Pap Smear and Mammography
On top of these benefits, Sun Maiden Plus also provides financial assistance for up to 3 children delivered and in case of pregnancy-related complications.
How much is this insurance?
Sample rate for Age 29, female, non-smoker with Php 500,000 life insurance coverage for Sun Maiden Plus is Php 2,719.75/quarter or 9,890.00/year. When renewed after 5 years, the rate will increase.
SUN Safer Life
SUN Safer Life is a non-participating, 5-year renewable and convertible term insurance product that provides life insurance protection until age 75. This is one of the convertible term insurance plans that offers your flexibility in case you would like another eligible plan.
SUN Safer Life provides life insurance coverage equivalent to 200% of the face amount; for example, if you have a plan with a face amount of Php 2,000,000, your coverage is actually Php 4,000,000.
It automatically renews every five (5) years up to age 75, with premiums adjusted based on attained age and without evidence of insurability. If in case you need an upgrade of your coverage, SUN Safer Life gives you the option to convert your basic plan to any eligible life or VUL product prior to the policy anniversary on or following the insured’s age 65.
Any additional benefit contained in the original policy may be included in the new policy if premiums are payable for life. Upon conversion, you will enjoy the same protection from the new product, while payment terms and other benefits may vary based on the new product selected.
How much is this insurance?
Sample rate for Age 29, female, non-smoker with Php 3,000,000 life insurance coverage (Php 1,500,000 face amount) for SUN Safer Life is Php 3,183.13/quarter or Php 11,575.00/ year. Rate will increase when renewed after 5 years.
Remember, all of these life insurance plans have their own set terms and conditions. It is best to talk to a licensed insurance advisor to get the full view of benefits and fine print.
If you want to get your very own quote, leave a comment below with your birthday and smoking habits. For a faster response, send us a direct message in any of our social media accounts: Facebook, TikTok, Instagram, or X (formerly Twitter).
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