TGFISG Updates
Does Your Insurance Portfolio Coping Up With Your Investment Portfolio?

Does Your Insurance Portfolio Coping Up With Your Investment Portfolio?

While we are busy building our investment portfolio, kumusta naman kaya ang insurance portfolio natin? Lumalaki din kay coping with the increase in our needs and cost of medical expenses nowadays?

Unfortunately, insurance portfolio is something that most of us are not taking cared of. Or perhaps not reviewing regularly. Many still consider insurance premiums as an expenses. For some, if walang nangyari sa kanila after year of getting the insurance, they are considering of cancelling it. Sayang daw ang bayad di naman nagagamit.

But let me ask you, if you get critical illness coverage or death coverage now, do you want to have critical illness or be dead the next day? Of course not. This should be our mindset. Let’s be thankful that we didn’t use it anyway. But if we do, malaking tulong diba.

For this type of portfolio, here’s some areas of benefit we need to consider.

DEATH/TPD

In the event maaga tayong kunin ni LORD, enough ba yong maiiwan natin para sa mga beneficiaries natin? OK lang siguro kung ikaw na lang mag isa sa buhay. Pano kung may anak ka, asawa at mga mahal sa buhay. Paano na ang kinabukasan nila? May makukunan kaya silang pangkain sa araw araw o may pang tuition ba sa college ang maiiwan mo? Hindi ibig sabihin na wala na tayo, titigil na rin ang pagtulong natin sa kanila. Having enough coverage on this risk is really a must kung mahal mo sila at kung concern ka sa magiging future nila na wala ka.

If you are a millionaire, do you think you need life insurance pa? Some will say hindi na nila need, some will say need pa rin nila. But I think the answer depends on them. There is one article in Forbes magazine before that there is a certain billionaire in Silicon Valley who bought life insurance worth around $200M.

You see, when we die, all our assets will be taxed by the government. Insurance proceeds do not have such taxes. If I am a millionaire, will I leave PHP100M worth of assets subject to estate taxes of more than 20% or just leave a PHP100M worth of insurance proceeds to my loved ones tax free. Anyway, if you get PHP100M coverage, you will not pay same amount naman di ba. For sure it will be much lower.

Amount of coverage varies from person to person, depending on current financial status. First, identify your beneficiary. For example, my 3 year old son. By right, we need to support them till age 23 because that’s the age they will graduate from college and can stand on their own. Let’s say my monthly expenses is $2000. So the computation goes like this $2000 x 12 (annual) x (23 – 3 yrs old) = $480,000. This is the minimum sum assured that I should have on my death/tpd coverage. In the event something happen to me, this amount will be enough to support my family for the next 20 years. However, this is just a minimum amount as we only compute the monthly expenses. You need to add up future expenses like college tuition, etc. At least you know how to calculate your life worth.

How much do you think is your life worth and how much insurance coverage you have to protect it?

ACCIDENT

We are all at risk in getting accident. Even if naglalakad ka lang, baka madapa ka. Kung nakasakay ka sa sasakyan, posibleng mabangga ito. Kahit yong akala mong safe na lugar at safe na moment, posibleng magkaron ng aksidente. Given na yan, wala na tayong magagawa kundi protektahan ang sarili natin.

Good kung minor accident lang with minor bruises. Pano kung accident na may serious implication? Like accident na mag result sa pagkabulag, pagkaputol ng paa, or even pagkamatay on worst case.

Remember, if accident at partial disability lang ang mangyari syo like loss of sight ng isang mata or loss of 1 leg, wala kang makukuhang claim sa life insurance mo with death coverage. Kase buhay ka pa, disable lang.

How much do you think is the cost of lossing 1 eye or 1 leg? Do you have enough protection when it happens?

CRITICAL ILLNESS

Base sa statistics, critical illness is the main cause of OFW bankruptcy. Imagine marami kang ari-arian: bahay, lupa at sasakyan. Then one day, na diagnose ka ng cancer at wala kang critical illness insurance. Di ba gagawin mo ang lahat para magpagamot. Syempre don mo pipiliian sa hospital na kaya kang gamutin, pero at a price syempre. Eh ngayon, since wala kang insurance, possible na maibenta mo lahat ng ari-arian na meron ka para lang maipagpagamot mo. Depende sa maging sakit at gamutan, baka humantong sa puntong maibebenta mo na ng palugi ang mga ari-arian mo para lamang pangtustos ng mahal na gamutan.

Pero magkano ba ang kelangan natin in the event of critical illness? Syempre iba iba ang figures depende sa sakit na pede natin ma incur. Pero mas mabuti pa rin na over insured ka kesa naman gamitin mo at kulang pala.

Check these figures from ANC on the Money:
– Bypass Operations can cost anywhere from PHP1M to PHP2.5M
– Operations to treat cancer can cost from PHP1M to PHP2M
– Dialysis can cost up to PHP4,000 per day

On average, mahigit isang critical illness ang pede natin maranasan sa buhay natin. Di ba may mga nai-stroke na mild lng naman. Meron din naman inaatake sa puso na nakaka survive pa.

When we say critical illness, di lang naman sya cancer or heart attack. Marami yan na na sa list, even yong di mo inaasan eh kasama pala sa criticall illness like blindness, deafness, dementia at iba pa.

The only uncertain is, kelan at anong sakit at pwedeng dumapo sa atin. Pero regardless kung ano pa man yan, ang importante handa ka.

How much criticial illness coverage do you have? Is it coping with the rising cost of medical and hospitalization nowadays?

HOSPITALIZATION

You will agree with me na mas mahal talaga maospital kesa maagang kunin ni LORD. Do you know how much would it cost for treatment sa mga hospitals nearby sa place nyo? Here in Singapore, no doubt about it. Sobrang mahal maospital dito. But good thing is, dahil advance naman ang technology nila, they can really help you get treatment the best possible way. Yun nga lan, don’t be shocked when you receive the bill.

If ma-hospitalized tayo in future, no one will know now for what reason and kung gano kalaki magagastos natin. Good kung konti lang, pano kung umabot ng sobrang laki ng bill mo?

In Singapore, 30% ng adult nila ang sakit cancer. Treatment cost of course could paralyze the patient financially lalo na pag wala silang insurance. Another factor is kung gano katagal na gamutan. Some few days lang, yong iba umaabot ng taon ang procedure. If that happens, can you imagine the cost it would take? Perhaps wala na tayong work non kung malala ang pagka hospital

Hindi enough na may life insurance lang tyo that covers critical illness. Need rin natin ng hospital coverage to make sure we get the best medical care in the event we get hospitalized.

How much medical coverage do you have? If you rely on your company insurance, it could be around $10,000 per year only. Buying personal medical insurance coverage is the most logical way to mitigate the risk.

INCOME PROTECTION

This is a must if we are breadwinner of the family. What if we cannot work due to illness? Do we still receive pay check from our employer? It’s good if the answer is yes. What if the condition worsens and you are required to quit your job. Do you think you can still receive your pay cheque?

Income protection coverage covers such risk. When are are hospitalized due to any reasons, income protection will give you daily income to cover any losses. Isn’t it great to be hospitalized without thinking where to get money your family badly needs?

How much income protection you have?

Insurance is something we want to get but we don’t want to use. For most people, they are considering insurance as expenses. But I have a different mindset. I consider it as an investment. Why? Because in life, death and illness are certain. The only question is when and what illness we might have in future. When it do happen, you will get a lumpsum payout from your policies. And for sure, that amount you paid is way less than the amount you will get. It’s like paying $100 for your premium and will receive $1,000,000 in the event such happen to you. Can you see the figure? Isn’t it a great investment?

For you investment portfolio, perhaps may mga charts and graphs ka pang record para dito. Now, I challenge you to do the same for your insurance portfolio and see if you have the right and enough coverage.

Talk to your financial advisor and try to work it out kung kailangan pa. Remember, insurance is perishable. Get it when you don’t need it than need it and you don’t have it.

Did you know that insurance policies in Singapore is one of the cheapest you can get? Even foreigners can apply and same world wide coverage. In case you questions, you need quotation, queries on your existing policy, feel free to contact me. If you are in Singapore, we can sit down and discuss the best policy suitable for your needs. Let’s have coffee and have discussion 🙂

About Richard Macalintal

Hi my name is Richard. I am a Registered Financial Services Consultant in Singapore. If you have any queries or you need help on your insurance policies and investment linked products, feel free to message me :-) We can have a cup of coffee while I do financial review and give advice with regards to your finances :-) Contact me thru email rlmacalintal(at)yahoo.com or SMS me +65 82235186. Disclosure: I am a Financial Consultant of AIA. The statements or opinions expressed on this site are my own and do not necessarily represent those of AIA.

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