Amongst all financial instruments, life insurance is one of the most misunderstood and unappreciated until it’s too late which is the reason why insurance penetration remains to lag behind in the Philippines. I really like that some insurers are becoming very creative in advocating awareness about financial literacy and the value of insurance and one of them is Sun Life Financial.

A few years ago, I was invited along with a few advocates and media practitioners to view Sun Shorts, Sun Life’s first salvo into the production of short films that will go beyond creating awareness — it leaves a lasting impression in the heart and minds of those who watch it. When I received an invitation for the advance screening of Sun Life’s new set of short films dubbed as Sun Shorts 2, I was really excited because I know these films will once again touch the hearts of many and move them towards being more mindful toward financial security.

As I viewed all 3 of the the new short films of Sun Life’s Sun Short 2, I was even more moved this time because that are really well made and even more emotionally engaging. I highly recommend everyone to watch the films of Sun Shorts 2.

They have already released the first film entitled “Waves”, a truly moving story about ensuring your dreams when you ensure the dreamer. Happy viewing!

38 million Filipinos are now regular internet users, according to a report by the Internet and Mobile Marketing Association of the Philippines (IMMAP). With the increasing number of Filipinos online, it’s important that services are available online as where so people can avail of them anytime, anywhere, at their convenience.

Over the last few years, local companies have been making strides towards giving access to their services online, such as retailers, car insurance providers, banks, and others.

In light of the need to be online, AXA Philippines launched AXA iON or AXA Insurance Online, the country’s first online insurance store, last September. Their aim is to make insurance available to people aged 18 to 45 who may not have time or may be too intimidated to go into a brick-and-mortar insurance office, or are out of the country and can’t apply otherwise, such as OFWs.

AXA iON offers four different plans, to present savvy online consumers with basic products for securing their financial futures: Savings Exentials, which is like a levelled-up savings account with a guaranteed payout; Academic Exentials, for saving up for your children’s education; Life Exentials, which pays out cash for up to 60 months in case of your death or terminal illness; and Health Exentials, which covers you for 35 critical conditions or illnesses.

Customers can pay their premiums via Visa or MasterCard credit cards, through an auto-charge facility.

The whole process is online, meaning anybody can apply from whatever device they’re using. Simply visit axaion.com.ph, fill out the online application form, and pay using your credit card. No need to submit any forms or talk to agents – although a representative will call you after your application to confirm the information you submitted.

If you’re still more comfortable talking to an agent, though, you can use the AXA iON platform as a starting point to explore the options available to you, and then you can go to an agent with more questions to help you choose the right insurance coverage.

This online application is also good for our OFWs, so that they can safeguard their earnings and provide for their family without having to fill out a million forms and wait very long for the process.

Hopefully, more providers follow this lead. When the application process for vital financial tools such as life insurance and health insurance becomes easier and more convenient, more people will be insured, and will be on their way towards financial freedom.

Your life is your greatest asset. Manage your risks by making sure you’re adequately insured.

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.