In buying a life insurance, you could be overwhelmed in all the terminologies that the insurance agent might tell you.
Here are some common terms you need to know so that you will be in the same level of thinking of your agent. And you can even give an impression you’re smart and you REALLY know what she is talking about.
1. Premium – this simply means payment. How much you need to pay. Mode of payment could be monthly, quarterly, semi-annual and annual.
2. Policy – or policy contract. The contract you will get when you buy a life insurance. There, the coverage, benefits and payment are indicated. All you need to know about your contract is there.
3. Maturity date – the date at which the policy owner can get the face amount. Some matures by age (e.g. age 65) or after certain period of time like 20 years or 15 years. All depends on what you choose.
4. Regular pay – payment until termination of the policy or until maturity of the policy.
5. Limited pay – could be 5 years to pay, 10 years to pay or 15 years to pay. Payment is limited to specific number of years you choose. But coverage could be until lifetime or until maturity of the policy.
6. Coverage – the amount your beneficiary gets once you policy owner prematurely dies. In some programs, this is double the face amount.
7. Face amount – this could be the same as the coverage, but sometimes in other programs it is not (you need to ask). This is often the basis of computation of premiums.
8. Dividends – this is the yearly payment the insurance companies pay their policy holders. Meaning, policy holders can earn by dividends. Although these vary annually, could be 1% to 4% depending on the annual investment return of the company and are not guaranteed.
9. Riders – these are additional features you like to add to your basic insurance benefits. This entails additional cost to the additional benefits. Some examples of riders are: critical illness rider, accident insurance, disability insurance, hospitalization benefits and waiver of premium when policy holder becomes disable.
10. Contestability period – a short window period wherein insurance companies can investigate and deny claims. This is usually 2 years when policy was enforced. If you die within the contestability period, the company will investigate whether you gave accurate and honest information in your application.
11. Insurance Claims – Actual fulfillment of promises of payment of benefits in life insurance. This could be payment of the coverage to beneficiaries in case policy holder dies, or payment of riders to the policy holder. Example could be: payment of particular amount due to critical illness, once policy holder becomes critically ill and it happens the policy has a critical illness rider.
12. Beneficiary(ries) – predetermined person/s the policy holder indicated in the application who will benefit to the insurance claims once the policy owner dies before the maturity date. This could be his/her children or spouse or parents.
TRIVIA:
What if you make your “other woman” your beneficiary? — This is usually not allowed and can be contested by the real wife if she finds out.
Buying life insurance is one of the most important thing you can do to yourself and your loved ones. It is a way of showing you love your family. If you think it is just an expense, think of this:
Somebody will need to pay for it; it’s just a matter of who? You, now? Or your Family when you’re gone.
Show your love this coming Valentine’s Day. If you think you cannot afford one, here is a link, to the Cheapest Life Insurance Ever!
When it comes to planning your future, NOW is always the best time to start. To learn more about Life insurance or if you need help with your financial plan/ goals, I will help you make it happen. Feel free to contact me.
Love your Family,
Read more:
How to Compute your SSS Retirement Pension
Top 10 Life Insurance Companies in the Philippines 2015
Too old for Life Insurance and Investments? Who told you so?
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thank you for this! Such a big help! will share this to my friends.. 🙂 keep it up.
Its really great. I like reading your posts doc. Thanks 🙂
Thanks.
Doc interesadoko kumuha s baby Ng pinsan Ko as a gift he will give birth this January u mention 2eeeks plng ang baby dpt ma insured na what kind of insurance kailangan Ko pr s Baby?at Ako dn doc I’m 35 turning this year anong life insurance pwede sakin my 2kong anak both boys 12and 6,,, thank u
Hi Grace, can you email me your contact number Para I can send you message in private? Text me here 09258895433
Hi Dr. Pinky,
Im so glad to have come across your website while trying to self-educate about life insurance. Your articles/posts were all very helpful. You were so right about ignorance being what makes Filipinos hesitant to get a life insurance. To be honest, I know very less about insurance. Although ive read some of your posts, i still need opinion or recommendations straight from you specific to my situation.
I am 24 yrs old with a monthly salary of 21k. I work in a call center. Single. Wala talaga akong savings because ive been helping provide for my family. I live with my parents and brothers.
What are the best insurance products for me? Im very. Concerned about health and does life insurance also take care of me during pregnancy until i give birth? Please help. I need more education about life insurances.
Also, for you personally, do you think sun life canada is a great go to?
Thank you so much po talaga for all the information.
Hi Frances, I emailed you in your email, kindly take a look. You can text me here: 0925-8895433 for more private conversation. Thank you – Doc Pinky
Hi,
I want to insure my husband but I’m not sure which plan and riders to get. Your help will be highly appreciated. Thanks.
Hi Ms Gia, I will call you today. Thanks for your inquiry.
Hi Dr. Pinky,
Im glad to have come across your website and was able to read some pertinent information regarding how to choose a life insurance.
However im still confuse which life insurance company i will go to and what riders to get.
I still need your expert opinion and recommendation, if you you please.
Im 30 yrs old and currently working outside of the country and single. I don’t have that much savings bacause im providing for my family.
Im interested about health and investment. What insurance product will suit me?
I need more education about life insurance.
Thank you very much and hope to hear from you soon.
Hi Lou, let’s talk privately. Email me: docpinky@myfinancemd.com
Hi. I’m 26 years old and a newly licensed physician. I’m a moonlighter right now but I’m planning to go into residency this year at the same time I want to start saving and start having insurancs. The problem that came to my mind is that I don’t have my own family yet. So my beneficiaries would be my parents for now. However, that will change once I get my own family, right? So in the future, does it mean dropping my insurance that I already have then get a new one?
doc, i sent you a PM. if you have not received it please email me: docpinky@myfinancemd.com