Choosing the right life insurance for you (Part 3)

By Randell Tiongson on August 25th, 2012

Question: What are the right criteria for choosing a good life insurance?—Jeremy Jessley Tan (@jeremyjessley) via Twitter


Answer: After discussing how much coverage you should have and talking about the different kinds of life insurance policies in parts 1 & 2 of this column, I will now close this series by discussing how you should choose your plan and provider.

Deciding on a type of plan should be consistent with your objective. If the only purpose of considering life insurance is protection, then a term policy is something you should consider. Further, if you just want to maximize insurance coverage and reduce cost, then a term policy is most prudent. Just make sure that you don’t mind paying premiums that will not be recovered unless a death claim is filed.

If you would like some savings to go with your insurance coverage at the same time, you may opt to get a permanent plan instead of a term policy. Some people would want some recovery of the premiums they are paying when the time comes they feel they don’t need any coverage anymore.

A traditional plan like a whole life insurance will have cash values that will accumulate over the years, typically with a guaranteed cash value and a nonguaranteed portion via dividends. Unfortunately, the returns of traditional insurance policies are very low, comparable to a time deposit rate. Accumulations in traditional plans are also on a long-term basis and will take you many years to break even.

A variable universal plan (or investment link), on the other hand, will provide better accumulation of funds as they are market-driven instruments. The downside of this product is that it does not offer any guarantees beyond death benefits. Still, it is expected to outperform traditional life insurance products over a long period of time, making it more popular nowadays.

Assess your need thoroughly—Would you want to combine your insurance coverage with savings and investment or would you want to do it separately? You can buy term and invest the difference—or you can buy a variable universal life policy that will do that for you.

If you want insurance coverage with guaranteed savings and are willing to accept low returns, then a traditional life policy is for you. If you want better returns but with volatility, then go for a variable universal life. If you just want the plain vanilla insurance, go with a term plan. There is no such thing as a ‘best’ life insurance product—it really depends on your need or affordability.

As to insurance companies, I’d recommend that you consider life insurance companies among the top 10 in the country because they are usually more stable and are highly reputable. I posted a ranking of the top life insurance companies of 2011 here.

The Insurance Commission monitors the operations of all insurance companies and has strict standards, particularly on solvency. Most life insurance companies are well capitalized and it is comforting to know that no life insurance company in the Philippines has ever folded up. It might also be a good idea to ask around about experiences of others with regard to after-sales servicing and claims paying reputation of different insurers.

For me and many others, customer service is a very important criterion—especially since a life insurance coverage is long term in nature.

You may want to get proposals from three life insurance companies of the same product and look at the benefits they offer. I notice premiums of some companies are substantially higher than others so it will be a good idea to be thorough when you are reviewing. Compare benefits and riders, add on those that you need and remove those that you think are unnecessary. When you are considering a variable universal life policy, check out the management fees—some charges are much higher than others.

Finally, I urge you to also be selective in dealing with your insurance advisor. I will go with an advisor who knows his products thoroughly, can answer most of your inquiries, can conduct a good needs analysis and will put your interest first before his sale. Unfortunately, quite a few insurance advisors have issues like misrepresentation or, worse, nonremittance of premiums. It is important that you deal with a professional and it is easy to spot one by observing the way he conducts his business.

Whether you buy from an insurance agent or from a bank (via bancassurance), make sure you get a policy that you need, you can afford, from a company that is reputable and from an advisor that you trust. Tip: If you notice that the advisor is so much in a hurry to close a sale and is more concerned about meeting his sales quota than your welfare, you might want to look for another advisor.

My prayer is that more Filipinos will be like you. More Filipinos have to be covered considering the benefits of life insurance.

This post appeared in the Inquirer.

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2011 Top Life Insurance Companies & my musings

By Randell Tiongson on June 19th, 2012

The Insurance Commission has released the ranking of the top Life Insurance Companies as of 2011 according to total premium income.

For the first time in its over 100 years of operations in the country, Canadian insurer Sun Life Financial emerged as the number 1 life insurance company beating the perennial leader Philamlife by a narrow margin of about 300 million in premiums. It will be interesting to watch out how the two largest life insurers will fare for 2012. Will Sunlife continue with its market leadership or will it be short-lived and concede it to Philamlife? My friends from both companies are all pumped up and this will be a good match to watch. Personally, I always believe that competition is good for everyone.

The French insurance company’s partnership with Metrobank continues to grow its Philippine business as Philippine AXA steadily holds on to the 3rd spot while Prulife of UK maintains its 2010 position as the 4th largest provider of life insurance in the Philippines. It is interesting to note that the revenue difference between AXA and PruLife is now only about 80 Million. Will we see changes in the 3rd and 4th ranking as well for 2011?

Insular holds its 2010 ranking of #5 but you will see that the Bancassurance partnership of BPI and Philamlife is closing in with only a 100 Million premium difference. The next 5 rankings are dominated by Bancassurance organizations which is an indication on how life insurance has been distributed in the past years.

2011 also shows the continuing shift of the types of life insurance being sold — from traditional policies to Variable Universal Life or Investment Linked plans. The deteriorating returns of interest rates seem to be a challenge for traditional life insurance plans to keep its marketability forcing buyers (and sellers) of life insurance to consider investment linked products even if they are not guaranteed.

While I’m ecstatic at the growth of the life insurance industry and I’m actually cheering on my friends in the industry, my issue has always been the same — there are not enough Filipinos with life insurance benefits. As of 2010, the Insurance Commission said that there are only 3.3 Million policies that remain in-force. 3.3 Million policies does not mean there are 3.3 Million Filipinos covered as many of those who buy life insurance will have multiple policies.  In the same report, the Insurance Commission disclosed that there were only about 315,000 new policies issued for the year 2010. My prayer is that growth in the life insurance industry should not just be limited to looking at premiums and we put the same passion into having more lives covered. Financial security given by a life insurance policy is very important to Filipinos as we are constantly faced with the uncertainties of life.

It’s great to see more and more life insurance companies taking a more active role in providing financial education which I believe is the real key to a sustainable growth for the whole industry. It’s just that we just need to do more, push more, teach more, advocate more and educate more.

My 2 cents.

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The blessing of feeling

By Randell Tiongson on March 4th, 2012

I rarely re-post blogs of other people but I am making an exception for this one.

My dear friend and TV5 Reporter & host of the Golden Dove nominated Radio Program Oplan Asenso (92.3 FM)  wrote something that I feel should be read by others. Michelle Orosa – Ople was covering an event at the Insurance Commission regarding the failure of a pre-need company and the anguish of those affected. Her blog is not only insightful, it is moving. Many times, media practitioners and writers just write about events, report the news or voice their opinions but I salute Mich for her empathy and being bold in voicing out her convictions. It’s people like Mich that makes me hopeful of the future of media. Way to go Mich, I salute you for your ‘feelings’.

———————

The blessing of feeling by Michelle Orosa-Ople

This was a scenario The Bad News Reporter—myself, often dubbed as such—had covered one too many times before: an angry crowd, officials scrambling to explain a wrong, microphones abuzz and an annoying scarcity of monobloc chairs. It was the same story all over again with only a different set of characters, a different set of figures and a stronger deluge of raw emotions. Today was, after all, the first time everyone got together in the pseudo arena called the Insurance Commission. Everyone knew it would be a box-office, action-packed hit for the news.

With a waiting-to-give-a-go-signal eye on my cameraman I cased the battlefield. The numbers were good: several hundred angry people in a room where tension was so thick that one could feel it in the air.

And then it started.

As the officials wrapped up explaining the problem and their proposed solutions, a woman grabbed the mic and harped her grievances right then and there. Cameras rolling, people around her caught the spark, fanned the flames, and soon were cheering beside her. They were tired of the jargon and numbers. They wanted action. The organizers managed to restore order among the madding crowd, but once the open forum started, the room was again filled with anguished voices tinged at times with frustration. Raw anger. Tears.

I was initially caught up in the usual motions of noting the best video, the best soundbites. My angle. But then, without warning, I stopped.

Without warning, I started to feel.

I don’t remember if it was the point where a mother choked on her plea to get her money back, or the time when a grandmother sharpened her tone to get her pain understood across the room. I just suddenly remembered that, once, my own father had been in their shoes, with the same company—investing what he had on a future that he wanted for his children. I suddenly remembered the difficulty he encountered to make our dreams come true, and imagined him across the room with that kind of pain, had the future he saved for fallen on 2011 or 2012.

And then the tears slid from my eyes.

It took a while for me to process my emotions. I was trained to go out onto the battlefield with an armor so thick, I’d come back to headquarters with all the details, sans even a tinge of bias, drama, or anything remotely related to subjectivity. I wasn’t used to “feeling”, at least not on the job. I’d save that for family and friends, those close to my heart.

And it was then I realized that was the problem all along.

It was when I started to feel that I felt the real story: the pain in the truth that there are people hurting. That those accountable must, to the best of their abilities, find a way to make things as close to right as they can. That as much details must be made available as possible so that informed decisions would be made amid the raw emotions. And as I saw how pained even the officials themselves were, I saw just as clearly that with this rapport (albeit not obvious), a workable solution would in time arise.

It was when I started to feel that their stories moved me, and showed me the blessings I had once taken for granted. It was when I started to feel that I became one with my job at that moment, and my purpose for being in that place, at that time made sense.

I’d save that for family and friends, those close to my heart.

My job—my work—should be close to my heart. All too often, it hasn’t. At least not in the way it was Designed to be.

I look around my life and lives around me and realize the human race is all too prone to stoic routine—from the usual terms called “the daily grind”, the “rat race” to extreme incidences of nurses and interns laughing at the bedside of a dying man.

What a shame.

Because we were created to feel. To be immersed in where we are. To make a real difference in the lives of people around us by knowing them, relating with them, sharing with them. That goes for every single job, no matter how simple or mundane. No matter how seemingly boring and routine, if infused with passion, love, joy and respect then excellence will follow. The workplace isn’t simply a place where money is earned and tasks are accomplished, it is also a place where one learns more about his/herself, the people around them, and what value he/she can place in other people’s lives. Work is about service in its essence, and real service means we. Have. To. Feel.

Jesus, when He started healing the sick and ministering to growing crowds, never lost compassion for each and every person around Him. He could have just concentrated on healing, teaching, performing one miracle after another, but He didn’t. He was deliberately personal.

I pray that we all be deliberately personal in our work. That we never forget to feel, to love, to cherish people around us. To learn from them and allow their lives and stories to permeate our hearts and defenses. I pray compassion overflows in every person’s life each and every single day.

What a beautiful change that would be.

“When he saw the crowds, he had compassion for them, because they were harassed and helpless, like sheep without a shepherd.”

~ Matthew 9:36 (ESV)

Thanks to Tetta for processing and literally de-briefing me today (hehe) and Pam for inspiring me to write this entry!  :*

*Follow Michelle Orosa-Ople at Twitter www.twitter.com/michelleorosa

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