Personal Development, Finance and Investing For Filipinos
An investment in knowledge always pays the best interest. Financial Education is your best investment.
Insurance is an effective way of managing and preventing risks.
It protects you against uncertainties that may incur financial losses on your part. A potential loss is transferred to an insurance company for a fee which is termed as “premium.” In turn, the insurance company securely invests the funds to let it grow and payout in case of a claim.
People who are protection oriented don’t feel complete without insurance. While others feel they will most likely save if they do without insurance. Just like banks, insurance companies are not charitable organizations. They make money by taking in a lot more money than they payout. Many financial experts are also anti-insurance especially insurances that are packaged with investments because they think people spend too much on it when the money could be more productive in other relatively high return investments.
Let’s then take the position midway between the 2 extremes. Insurance can secure an estate and tide survivors over difficult times, but you shouldn’t limit your investing to insurance alone because you can make a lot more with it somewhere else with proper and right investments.
The following are the must-have types of insurance for our protection and our surviving loved ones. They are as follows:
The law requires that you should have at least the minimum required auto insurance coverage. This type also insures you against any possible damage of another car or injury of a person in a vehicular accident whether you are at fault or not. It can even cover any expenses related to the incident such as medical treatment or legal defense costs.
This is needed to pay for your final arrangements, any debts left outstanding at your demise, to pay taxes that may come shortly after your demise, and to protect the financial security of your heirs if you have any. It is best to buy before you are thirty-five where premiums are lower and you are in the best of health so there is more likelihood of approval.
Everybody needs health insurance to pay for the big medical bills that could wipe you out financially. Most employers provide health insurance and if you are self-employed, you need it as well. Most companies extend health insurance to immediate members of the family. You need a basic policy that covers limited hospital, surgery and physician fees. You need a major medical policy to cover the cost of a long illness or lengthy recovery and if you have dependents or no other source of income, you need a disability policy.
House or Property Insurance
This type protects your house or belongings in case of burglary, fire, weather or any natural or man-made disaster. Mortgage lenders require this type of insurance for a more secured collateral.
Although some people say that they can live without insurance, it is still considered a necessity due to the level of risks we have in our daily lives. Be it health, long-term, disability, car or homeowner’s insurance, these policies will protect you from financial losses in case something unexpected happens.
Beware, though, of insurance traps. At times, the insurance business is tricky. Some insurance salesmen only give the positive side of things and only the good benefits, not disclosing all of the downsides. A lot of fine print is left out, and other things can be perceived and worked a bit differently than actual. Let us take time to listen less and read more before you decide to take on one. For sound financial purposes, buy insurance to help benefit the financial budget, not hinder it.
Always remember, the best time to get insurance is when you do not need it.
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ABOUT THE BLOGGER
Hi, I'm Ralph Gregore Masalihit!
An RFP Graduate (Registered Financial Planner Institute - Philippines).
A Personal Finance Advocate. An I.T. by Profession. An Investor. Business Minded. An Introvert. A Photography Enthusiast. A Travel and Personal Finance Blogger (Lakbay Diwa and Kuripot Pinoy).
Currently, I'm working my way toward time and financial freedom.