Insurance: Don’t leave life without it

Question: Our life insurance agent is scary. When he calls on us, he invariably talks about the potential perils to life. If we are to celebrate life, why does he keep on bringing up the dangers to it? What is the best way to handle our life insurance agent?—Newlyweds

Answer: At the risk of sounding like a broken record, life is a journey.  But to put a new spin on it, treat life like an airplane ride. For most people going on vacation, the excitement starts with the plane ride.  Stepping into the airport, checking in, breezing immigration and waiting at the lounge for the final boarding call while watching other planes land and take off get a vacationer’s heart pumping a little faster. Exhilaration picks up as he walks through the tube leading to the aircraft. And as soon as the airplane doors are closed, the flight attendants announce the downer – the flight safety instructions.

As you take off in life you will also need flight safety instructions. Remember that there should not be too much carry-on baggage in the form of material trappings that may result in large budget variances and unnecessary borrowing. So bring on board a comfortable baggage allowance.

More than the baggage allowance, you must fasten your life’s seat belts just in case there is financial turbulence along the way. This is like getting disability insurance. The forms of disability insurance are personal accident, temporary disability, permanent disability, dismemberment and hospital income benefit. The great thing with disability insurance is they can be packaged with other insurance products so that you would need to remember only one amount of insurance premium and one premium payment due date. Just like adjustable airline seat belts, disability insurance can be adjusted to tailor-fit your coverage needs. Some pre-designed disability insurance products are even packaged for free with savings and investment products.

The emergency landing that airline safety instructions refer to can be likened to a major illness or one’s untimely demise.  While an airline life vest will protect just one person, life insurance is there to protect you and your loved ones. Some insurance policies give financial coverage against dreaded diseases. But all will provide your loved ones with financial coverage in case of your untimely demise. To a certain extent, life insurance breaks the marriage vow. Couples promise to take each other as their lawful spouse “to have and to hold, from this day forward, for better or worse, for richer, for poorer, in sickness and in health, until death do us part.”

Life insurance goes beyond this vow by helping a person who meets an untimely death to take care of his or her spouse financially even beyond death. Similar to disability insurance, life insurance can also be adjusted to suit one’s particular coverage needs.

Flight attendants will ask you to review the flight safety card that contains summarized instructions. Similarly, you will need to read your insurance policies carefully to understand for what amount and under which conditions you and your loved ones are covered. Although seemingly simple, a practical advice is for you to know where you file your insurance policy, just like when flight attendants make you aware of where your life vest is kept. Otherwise, you or your loved ones will have a difficult time claiming insurance benefits.

As airline seat belts should be fastened when seated, insurance policies should be paid up and enforceable all the time as danger lurks everywhere. Do you remember how the popular young Filipino actor died in his sleep?

Of course, if you want to fully enjoy a long flight in life, you must take care of your health and that of people around you. That is why airlines prohibit smoking. This is also why you should also avoid vices that may shorten your flight in life such as smoking, drinking, gambling and even extramarital affairs.

So how should you handle your life insurance agent? Handle them with much gratitude for bringing the need for life insurance to your attention. Just like flight attendants, all they are after is your safety while you enjoy your flight.

If you want to know more about buying insurance as well as the Personal finance Advisers’ empowering comprehensive personal finance (training) programs, call 2161541 or visit www.personalfinance.ph.

For now, please make sure your minimal carry-on life baggage is stowed, your insurance policies are paid up and in force, and that you have read your policies with eyes and minds wide open. Please turn off all consumerism devices as they may interfere with your financial navigation systems. Then sit back, relax and enjoy the flight.

On behalf of everyone at PFA, we thank you for choosing to read this column. We wish you a pleasant life’s journey.

(Efren Ll. Cruz is a registered financial planner of RFP Philippines, personal finance coach, investment adviser and author. Questions may be sent by SMS to 0917-5050709 or e-mailed to [email protected].)