- Insurance policy is the contract drawn up between an individual and an insurance company.
- Insurant – someone to whom an insurance policy is issued.
Reference: The New Lexicon Webster’s Encyclopedic Dictionary of the English Language, Deluxe Edition
|The cost of life insurance premium per month or annually will depend on your age and health conditions.|
|Insurance Cost Doesn’t Need to be Expensive|
How Much Does Life Insurance Cost?
Insurance is an income protection for your family. Think about this, what would happen to your spouse and kids just in case you will go to heaven earlier? Because God wants you in His side in heaven, he let you leave your loved ones in this planet earth.
Ask yourself, do you really love yourself? Yes! Do you really love your family? A BIG Yes! Prove it, if you love your family (spouse, kids, parents). Show it, how? Give them a protection especially if you are the bread winner or the income earner.
If your family’s income is P400,000 per year, give them at least 3 to 5 years recovery period in case you go to heaven. It means the face amount should be P1,200,000 to 2,000,000. Let’s calculate it;
P400,000 X 3 Years = P1,200,000 or
P400,000 X 5 Years = P2,000,000
How Do Rich People Treat Insurance?
For them, insurance is an investment. They get insurance with high face amount for them to make sure that their family and business will continue after they’re gone. Should you treat the insurance as the way the rich people treated it?
If a rich man earning P2,500,000 annually? What do you think he will give his family when he will go to heaven?
P2,500,000 X 10 Years = P25,000,000
P2,500,000 X 15 Years = P37,500,000
Now you know how much insurance coverage should you have. Let us now talk about the cost of “premiums”. It depends upon your age, health situations and work activities.
Let give you an idea on the cost of premiums that I am paying annually (this is for my husband) he is 32 years old decided to give me a P1,000,000 in case he will leave this planet earth and he want to go to Jupiter, Pluto, venus, mars and uranium (just kidding).
He will get a life insurance, waiver of premium and accidental “d*ath” benefit.
Age: 32 (2014) with annual premium amounting to P5,510. On 2015 at age 33, he will pay P5,590. On 2016 at age 34, he will pay the premium amounting to P5,690
As you have noticed, it is not expensive to buy an insurance, it will just cost you too much if you don’t know what it is and some agent offers you what they insist.
Going back to the question, how do rich people treat insurance? They treat insurance not just an income protection but as an investment as well. Right?
- Term Life – The premiums are being paid every year. If you didn’t pay the premium and something happened to you, your beneficiaries can’t receive the “face amount” from the insurance company. The face amount are paid out to your beneficiaries (spouse, kids, parents) only when you die.
- Accident – you will get the face amount value if you are injured or killed due to an accident.
- Medical or Health Benefit – you must have this to cover the cost when you get to be hospitalized.
As a Summary:
- Compute your annual income times the recovery period you want to give to your beneficiaries to know the ideal face amount value.
- Life insurance is affordable, not expensive. If it is, somethings wrong with your agent or somethings wrong with your decision.
- Buy only what you need, if you need insurance, buy insurance only. If you are investing in mutual funds and the agent is offering you an insurance plus investment, think twice. It will cost you too much.
Financial Tips: Buy insurance and wish on not to use, be careful on your day to day activities such as working, driving. P1,000,000 face amount is easy to earn. Insurance is just an income protection not an “income” itself. Be careful in choosing life insurance companies, search and investigate which company is the best and which company is easy to approach during “claiming” of benefits. Insurance companies are all best because they provide “INSURANCE”, but how do they provide services in their clients.
How Much Does Life Insurance Cost? Buy term-life and invest the difference. Simply means just buy what you need, and the excess money should be invested in other companies such as stock broker, mutual fund companies or even in the banks offering UITFs (Unit Investment Trust Funds). More on this topic later.
Money Quote for Today:
Money is extremely important in the areas in which it works, and extremely unimportant in the areas in which it doesn’t. – T. Harv Eker – Wealth Principle on Secrets of the Millionaire Mind