Buying insurance is a bit complicated for those who are not familiar with it. Often times, insurance agent do not discuss the topic pretty well. Some of them just do product pushing and let the client get what they want base on their personal gains.
When buying insurance, it is the client’s responsibility to educate themselves on what they are getting. Agents come and go but the insurance companies remain. What the agent tell you now just to make you decide to purchase the policy might be different than the reality. All the details are in the fine print where you put your signature. But often times, we don’t have the time to read all those documents. We just rely on what the agent told us.
Upon claim, there goes all the issues. It’s only then you will find out that you get the wrong policy with the wrong coverage that you don’t want. It’s too late by then.
In buying insurance, you only need to be aware of these 5 coverages. I arranged this base on importance and the sequence of policies that we should avail first.
5 Insurance Coverage You Need To Have
This covers hospitalization expenses. As long as you got admitted of any cause, you should be able to claim on this policy. The more coverage the better, as you can get coverage from a better hospital facility. Most of this policy can be used only on the country of insurance, so get it on the country where you reside. It’s mostly term insurance, no cash value so you can change anytime you want as long as you are insurable and no medical history. In Philippines, once a regular employee, we are entitled to medical coverage. However, we rely on it too much that we forget to buy our own policy. What happen after you retire at age 60 for example and have some medical issues? You won’t have any medical cover by then and all expenses will be at your own expense. You may not able to get medical insurance by that time due to current age and medical condition. Get this policy while you are still young and healthy before it’s too late.
This policy gives you lumpsum benefit in the event you are diagnosed with any of the critical illnesses listed. There are 2 types of this plan: EARLY CRITICAL and CRITICAL policies. As you all know, illnesses have stages. For example, a stroke can be minor or major. Same with heart attack. For cancer, it can varies from stage 1 to 4. If you get a CRITICAL ILLNESS policy, it only covers major stages. So for cancer, you might get coverage when it’s on stage 4. For stroke, you might get cover once it is major stroke or major heart attack. Most of the critical illnesses are not fatal, mostly are treatable and can be detected on early stages. Once it reaches the major stage, it’s like 50/50 chance of surviving. Thus, having a critical illness policy for me is not a good idea. What you need is the EARLY CRITICAL ILLNESS policy. This policy covers all stages of critical illnesses, from early to major. Thus, you have a high chance of claim compare to the other one. This is the only critical illness plan that I am recommending. Take note of the critical illnesses list covered for better understanding of the policy.
It gives you coverage upon accident. Why do you need one if you already have medical insurance? Most accident cases do not require hospitalization, only outpatient treatment. And because you are not hospitalized, you cannot claim under medical insurance. But if its due to accident, you can claim for it either inpatient or outpatient treatment. Aside from that, accident policy gives lumpsum payout upon accident death or disability.
4. Death/Disability Insurance
This policy gives you lumpsum benefit in the event of death or total disability. Death pertains to any cause. For the total disability definition, it is best to check with your insurance companies as there are various ways to define it’s coverage. This policy is mostly for the benefit of our beneficiaries. Aside from immediate protection, it can be your legacy.
5. Savings/Investment/Retirement Insurance
Once you are done with the 4 coverage above, you can now plan for this coverage. As per above, this will give your money the chance to grow for your future use. There are lots of policies to choose from, depending on your risk, time horizon and retirement options. Choose the best policy that suits your needs. The younger you start, the better your chance to grow your money.
There is no single policy that covers all these. You can get 2 or 3 coverage in one policy, but never 5 in 1. It’s better to get them individually for better protection and coverage.