Disclaimer: Grit PH is not affiliated with any of the insurance companies featured in this article. The sole purpose of this guide is to educate our readers on how to effectively choose life insurance policies.
In 2018, the percentage of Filipinos who have life insurance passed the halfway mark of the country’s total population.
Out of an estimated 104.9 million Filipinos, 52.07 percent are now reported to have life insurance coverage.
It’s good to see that more of our fellow Kabayans are realizing the importance of Life Insurance.
But aside from the financial support to the principal’s surviving family, what other benefits can be gained from it? And what are the different types of Life insurance?
- Benefits of Life Insurance
- Types of Life Insurance
- Top 10 Life Insurance Companies in the Philippines
- How to Find the Best Life Insurance Company and Policy for you
Benefits of Life Insurance
To give us a better idea of what life insurance brings to the table, here’s a list of its top 5 benefits.
Pays for Medical and Funeral costs
One important financial problem that life insurance helps solve is the incurred expenses for medical and funeral expenses.
Both are huge money drains if not prepared for and can cause further grief among family and relatives.
With life insurance, you ensure that your loved ones will have the necessary financial support for both hospital and funeral bills.
The loss of a family member, especially if he or she is an income provider, is a huge undertaking both emotionally and financially to the surviving family.
This could deal a huge blow to their standard of living since it severely affects their source of income.
With life insurance, the impact of this loss can be lessened as it can act as the family’s source of temporary income especially during the difficult period of adjusting and coping with the loss of a loved one.
Funding Various Financial Goals
Life Insurance offers additional benefits through the form of fund accumulation for specific future financial goals.
Principal holders can use it to help save for their kids’ college education, purchase a house, and even serve as a resource for funding a business idea.
Acts as a Retirement Nest Egg
Modern life insurance also serves as a tool that principal holders can use to get in a better financial position in the future.
Most products come with a long term maturity option, which promises a lump sum amount that can act as a hedge against financial worries during your retirement.
Covers costs incurred from taxes and debt
Benjamin Franklin once famously said “There are only two sure things in life, death and taxes”. An advice that reminds us that both are a part of life.
Which is why it’s such a huge financial problem when the deceased family member leaves behind unsettled debts and taxes.
Not only will the surviving family assume responsibility of paying them off, it could also strip them of access to any valuable resource and property that the deceased left behind since these will be used as payment instead.
Life insurance could act as protection in this type situation since the premium can be used to pay for unsettled debts and taxes.
Types of Life Insurance
As G.I Joe once said, “Knowing is half the battle”. Equipping yourself with the right information makes for better decisions. Let’s take a look at the 4 different types of Life Insurance so we can zero-in on their features.
This type of life insurance policy grants a lump sum after a specified amount of time or upon death. The policy owner is required to pay the premium for a predetermined number of years or until a specific age is reached.
- Allows for saving up for specific purposes (college fund, retirement)
- Guaranteed returns upon maturity
- Offers some form of insurance coverage
- Higher premiums compared to other types of life insurance
- Not the best option for those looking at full life protection
This is the simplest form of life insurance you can obtain. Upon death, the beneficiaries are paid the benefit.
- Low premium requirements
- Strong option for policyholders who need insurance but can’t afford whole life or endowment
- Easy to understand
- No benefits if policyholder outlives the term period set
- Premium usually gets higher upon renewal of terms
This type of life insurance provides coverage for the policyholder’s entire life or until they reach 100 years old. It acts as both protection and savings mechanism since a portion of the premium is allocated to build up cash values.
- Offers permanent protection for full life or 100 years
- Flexible in terms of payments of premium
- Fixed premiums
- Comes with additional features and “living” benefits
- Higher premiums
- Can be harder to understand due to complexity versus other types
Variable Universal Life (VUL)
This type of life insurance serves as both life protection and investment vehicle in one package.
A portion of the premium is allocated into various investment vehicles for the purposes of wealth creation. The contract’s earnings are based on the performance of selected investments.
- Dual purpose: Life insurance plus investment tool
- No maturity age
- Cash value is payable along with the assured sum
- Death component not limited to face value
- Cash values and dividends are not guaranteed
- Face amount and death benefit is dependent on investment performance
- Includes various investment fees
Top 10 Life Insurance Companies in the Philippines
Now that we have an overview of what life insurance is and its various types, let’s now have a look at the top insurance companies in the Philippines offering these products.
The lists below are based on last years submitted unaudited quarterly statistics for each insurance company.
Top 10 Insurance Companies based on Premium & Net Income:
|Insurance Company||Premium Income||Net Income|
|Sun Life of Canada (Philippines), Inc.||P32,114,016,858||P6,941,929,276|
|Philippine AXA Life Insurance, Corp.||P26,184,554,497||P2,308,842,620|
|BPI Philam Life Assurance Corp., Inc.||P20,329,487,893||P1,700,128,152|
|Philippine American Life & Gen. Ins.Co.||P19,896,346,899||P5,624,601,309|
|Pru Life Insurance Corp. of U.K.||P19,221,205,565||P1,327,990,346|
|Manufacturers Life Ins. Co. (Phils.), Inc., The||P17,638,454,537||P3,341,511,404|
|Insular Life Assce. Co., LTD., The||P11,675,268,038||P4,123,830,237|
|BDO Life Assce. Co., Inc. (Generali Pilipinas Life)||P9,871,458,393||P1,531,230,238|
|Manulife Chinabank Life Assce. Corp.||P8,211,129,912||-P8,143,176|
|United Coconut Planters Life Assce. Corp.||P6,506,929,156||P614,080,023|
Top 10 Insurance Companies based on Total Assets & Networth:
|Insurance Company||Total Assets||Networth|
|Philippine American Life & Gen. Ins. Co.||P251,373,055,847||P69,454,129,569|
|Sun Life of Canada (Philippines), Inc.||P233,146,030,504||P27,554,851,100|
|Insular Life Assce. Co., LTD., The||P137,609,031,068||P37,824,999,770|
|Philippine AXA Life Insurance, Corp.||P109,659,687,494||P3,049,313,779|
|BPI Philam Life Assurance Corp., Inc.||P103,184,042,544||P7,149,854,289|
|Pru Life Insurance Corp. of U.K.||P99,122,732,454||P3,375,322,449|
|Manufacturers Life Ins. Co. (Phils.), Inc., The||P98,150,689,057||P14,115,973,352|
|SunLife Grepa Financial, Inc.||P47,000,940,689||P3,210,166,978|
|BDO Life Assce. Co., Inc. (Generali Pilipinas Life)||P36,590,878,510||P6,284,447,010|
|Manulife Chinabank Life Assce. Corp.||P33,268,200,054||P644,056,563|
How to find the best life insurance company and policy for you
Deciding on which insurance company to entrust your hard-earned money is key essential. After all, you’re not doing this for yourself, you’re doing this mainly for your loved ones.
On this section of our guide, we’ll provide you with tips on how to choose your insurance company and how to compare insurance policies.
Qualities to look for in Life Insurance Providers:
- Company should be listed as a licensed insurance firm (check out the Insurance Commission’s list to verify)
- Check the company’s background in the insurance industry. Ideally, you should pick one with an outstanding reputation.
- Check the company’s financial performance. High net worth and high premium income may be good indicators (refer to the list of the top insurance companies we’ve listed above).
Tips on how to compare Life Insurance policies
1. Reach out to agents from different insurance companies so you can get an overview of the products they offer
2. Request for copies of their brochures and other paperwork to get a detailed overview of their benefits and premiums.
You can also Google these online if it’s available on their website.
3. Make a comparative analysis of their benefits and riders.
Decide on which ones you want to make a priority and which one you can deal without
4. Make a comparative analysis of their premiums.
No one insurance company or product are the same. Some may offer more benefits and features for the same premium price.
Like a smart shopper, balance out each product’s pros and cons and determine which one fits your needs best
5. Make sure you understand and review the contract before signing up.
Some important factors to note are insurance charges and overall fees.
Remember, you’ll be paying on a regular basis so knowing how your money is being used for your insurance is crucial.
6. Be thorough and ask questions.
Most agents are more than happy to discuss their products with you. Take this as an opportunity to learn more about the ins and outs of what they offer.
If you find something difficult to understand, have them explain it to you in the clearest way possible. Don’t be afraid to ask a lot of questions, mind you, it’s your money.
Knowing if you’re choosing the right insurance and insurance provider is essential to getting the most out of your investment.