Exactly a year ago, I consulted a financial adviser and decided to get myself a life insurance. It is not the typical life insurance with critical illness and death benefits alone. It also has living benefits as part of the whole plan is allocated for investing in the Philippine stock market. This investment is also known as VUL or Variable Universal Life Insurance. So what really pushed me to get myself insured? Let me share my story.

In my first few months of being a working professional, I came across a facebook page named Peso Sense. I became very hooked in reading their posts not only about the different financial success stories but also about the prevalent struggles most people are facing in terms of finances. By constantly checking the said page, I learned about the importance of budgeting, saving, and investing… and insurances to make our financial life prosper.

Most Filipinos are negative when it comes to investing into insurance plans. Just a waste of money. Useless. It is like condemning myself to die. That’s just few of the words being coined for these underrated protection policies. I myself even considered those as impractical investments to consider. It was never my priority until I slowly gained financial knowledge and considered myself as a financially-literate individual after making some research and talking to like-minded individuals to deepen my financial wisdom.

Eventually, I came across this Financial Planning Pyramid which has a basic rule of starting from the bottom third all the way up if you want to achieve financial freedom. The three levels are Wealth Protection, Wealth Accumulation, and Wealth Distribution. If you’re still in your early years of establishing a stable financial ground, it advisable to get yourself protected through building an emergency fund, having a good credit score, and getting yourself insured. This will enable you to have a strong financial foundation that could safeguard from unwanted financial losses which could be due to certain life’s uncertainties such as accidents, sickness, or even untimely death.

If you go directly to investing and an unexpected mishap showed up, you can’t just pull all the investments that haven’t ripened yet just because you didn’t get yourself financially-protected. Worse, you may resort to debts just to make to cover all the emergency expenses. Some people choose to skip this level thinking that they are strong and healthy all the time.

Being the breadwinner of my family, I couldn’t afford not getting myself a financial protection. Though I am engaging myself into different investments, the feeling is still different when you know you have something to turn to should anything happens to you.

Having a Health and Life Insurance is not for everyone

I know you were looking for the answer whether you should really get yourself an insurance or not. The answer is you don’t really have to. Yes, I am serious. You can just forgo getting yourself insured if you fit to the following criteria:

• You have accumulated enough wealth and assets. If you can already take care with the financial burden caused by life uncertainties that may happen to yourself and to your loved ones, then you can skip the protection part.

• You are immune to all kinds of diseases. If you think you have the power of immortality, you can also skip being financially protected. Why bother wasting your money to something you can’t use in the future?

• If there’s no one who would be burdened if you get sick or taken out of the picture. If there's no one who is financially dependent to you, then you can consider yourself exempted for getting a protection plan.

Points to consider before getting an insurance policy

It may sound like I’m stating the impossible in the abovementioned points but I just want you to realize the importance of having yourself protected financially. Let me just give you a few things to consider before getting yourself insured.

• Don’t get an insurance just because everyone else is doing it. You might not be ready for it for it financially. Remember, it may take 5 to 10 long years of paying insurance policies. Are you ready for that financial responsibility? Make sure that you can sustain the payment until the end of the term. Otherwise, your policy could be forfeited in no time.

• Talk to the right people. There are some people who may give you false information about getting an insurance. It is important to talk to someone who have already built a reputation in contributing to your financial wisdom.

• Health and Life Insurances are cheaper when you’re young. The older you are, the greater risks in your health. Thus, delaying financial protections could also mean paying for a greater amount of health and life insurance.

• Make sure to read everything before signing the contract. You have to fully understand everything that is being written in your insurance policies. Always make sure to raise your concerns to your financial adviser should anything seems unfamiliar to you. Remember, ignorance is really expensive. There might be underlying expenses due to certain policy inclusive that you really don’t need.

• Do not get too expensive insurance policy. This is what I have learned from getting myself insured a year ago. I opted for a policy with the very least insurance coverage. Currently, I am paying a monthly premium of 1,000 pesos or 20 USD, and I don’t have any regrets of doing it. I have to be honest with my financial adviser that that is the amount I could afford in a monthly basis. Until now, I am satisfied with my decision since I know I still have long years to go to have a compounded interest on the investment part of my insurance plan.

I got myself insured at the age of 21. One year down and nine more years to go before completing my VUL policy payment, but I’m just glad I started at a very young age while I’m still young, able, and free from huge financial responsibilities. I hope you got something from this article. Let me just remind you that the purpose of posting this is not for a financial advice, but to make you realize the importance of getting yourself protected financially.

GIF and Photo Sources:

1, 2, 3, 4

I am currently initiating a finance related contest entitled "The Budget Challenge". If you are interested to join, see the full mechanics HERE

Previously-posted finance-related articles that you can learn from:

• Three Ways to Invest in the Stock Market

• The 18th Cycle Registration for FarmOn.ph Is Now Open

• The Silent Phase of the Market Will Reveal The Investor In You

• Different Investment Vehicles that You Can Ride Towards Financial Freedom

• Factors to Consider Before You Start Investing

• A Summary of My Financial Activities for the First Quarter of the Year

• Different Budgeting Techniques

• Main Reasons Why You Are Unable to Save All-Year Round

• Should Your Long-term Savings be in Banks?

• Important Points to Consider Before Taking a Loan

• My Credit Story: How I Managed to Pay-Off Someone Else’s Debt

• Four Common Financial Mistakes a Millennial should avoid

• How do you keep track of your Income and Expenses?

• TRAIN Law and its Counter Effects to Filipino Consumers

• Are You Prepared to Invest?

• Strategies for an Effective Cash out of Steemit Earnings

• How Does Decisiveness Affect Your Finances: Explained Through Trading SBD on Bittrex

• Three Important Things to Learn from Cryptocurrency Market Crash

• Understanding Money’s Liquidity: How to Apply it to Steemit Earnings?

• Invest in Philippine Stock Market for as Low as 5,000 Pesos

• Eight Lessons From “The Budget Challenge” Everyone Must Learn From

• Invest in Learnings

• ICO – A Road to Million?

• What Is Your Budget Principle?

• Basic Understanding Of Bitcoin And Cryptocurrency