Fundamentally, life insurance is all about risk management. This financial tool’s primary purpose is to stay ahead of the major life risks.
These major life risks include:
- Dying too soon
- Getting sick or disabled
- Living too long
And the truth is, any of this could happen to you at anytime. Yes, anytime!
That being said, the ideal time to get your first life insurance plan is yesterday; if not yesterday, it’s today.
The best time to get life insurance is ideally when you’re young, healthy, and financially capable. Let’s discuss these key considerations one by one:
While You’re Young
Premiums, or the payments you pay for your life insurance, are computed primarily based on your age, among other risk factors.
The younger you are, the lower your premiums will be for the same coverage.
Example: you are getting a P 1,000,000 whole life coverage while your friend who is 5 years older plans to get the same coverage. Most likely, your friend will have higher premiums than you because of the age difference and it could be significant.
This is why the best time to get life insurance is today.
While You’re Healthy
Overall health status is also a primary risk factor in getting life insurance.
Once you develop a medical disorder or severe illness, otherwise called pre-existing condition, that will already influence your insurability, or your ability to qualify for a life insurance coverage.
Hence, when you apply for a life insurance plan with a pre-existing condition, your premiums will most likely be higher than the standard or worst, your life insurance application will be rejected.
While You’re Financially Capable
Once you start earning, life insurance becomes a crucial part of your personal finance. Its primary use is to protects the rest of your income, savings, and cash flow.
How? By paying a small amount for your life insurance, you will receive a lump sum or huge amount of money in case a major life risk mentioned happens to you: death, dread disease, or disability.
The moment you have dependents, like spouse or kids, including parents and siblings who rely on you, life insurance is already non-negotiable.
Breadwinners need life insurance to make sure that there is enough money to cover for any impending major life risk. Imagine the scenario if you as the breadwinner get taken out of the picture: what happens to the family or dependents you leave behind?
Life insurance provides for them even in your absence. Some call life insurance is your final act of love.
Certain milestones in life also trigger the need for additional life insurance such as:
- Getting married – It’s no longer about you, but about you and your husband or wife.
- Having children – To help your dependents, additional life insurance may be availed. More people who depend on you, the higher coverage you need.
- Buying a house or taking on loans – Some financial institutions require life insurance to make sure that a house or lot gets to be paid.
- Starting a business – Putting up a business requires life insurance as a security measure in case you, the business owner becomes absent through untimely death. It is in your business’, including business partner’s and staff’s best interest that they have financial cushion in case that happens.
Let’s get you your first life insurance plan and discuss your options with AIA Philippines!
Allow me to help you. Book a consultation with me to know more.
