PART
7 |
INSURANCE
AND MEMORIAL PLANS |
| Insurance
Protection Goal |
n•Do
you (and your spouse, if you are married) have life/accident/disability
insurance? A memorial plan? (See Tips below.) Put the
annual cost of insurance and memorial plans in the space
allotted in Column M.
n•How
much will your spouse contribute? Put in Column N.
n•How
much will you contribute? Put in Column O. Add to get
the totals M1, N1, and O1. Divide these
by 12 to get the monthly costs,
M2, N2, and O2. |
| |
M.
Payments/Year |
N.
Spouse Contribution |
O.
Your Contribution |
| Life/Accident/Disability
Insurance |
|
|
|
| Memorial
Plan |
|
|
|
Total |
M1
= |
N1
= |
O1
= |
Monthly |
M2
= M1/12 |
N2
= N1/12 |
O2
= O1/12= |
|
Tips:
n•
The basic question to ask when choosing your life insurance
plan is: “If I die today, how much money should I leave
with my immediate family (beneficiaries) so that I know they
can still live comfortably?” Call this amount Z.
n•Consult
an insurance agent and ask, “How much premium should
I pay for so many months and years so that I can leave Z amount
of money to my beneficiaries?”
n•If you
can afford the premium, get the insurance plan that will pay
out Z amount of money to your family. If you cannot afford
the premium, ask your agent for insurance plans that you can
afford. Remember that if you miss even a single premium payment
you may forfeit your previous payments and your insurance!
So make sure you choose a plan that you can afford.
n•You
cannot be expected by other family members to pay for their
life insurance. By paying for your life/accident/disability
insurance you are making sure they receive adequate monetary
support when you pass away. However, you and your spouse can
discuss how the two of you can share in insurance payments
to make sure that your children will be properly supported
if one or the two of you pass away.
n•To set
the amount of insurance for your property, you ask yourself,
“How much should the insurance be so I can rebuild my
house (in case of fire and other property damage) to, at least,
the same state it was before?” Then, as in above, find
out how much you can actually afford.
|
| Retirement
Goal |
n•
Do you (and your spouse, if you are married) have a retirement/pension
fund or plan? (See Tips below.) Put the annual cost of payments
for your and your spouse’s retirement/pension funds in
the space allotted in Column P.
n• How much
will your spouse contribute? Put in Column Q.
n• How much
will you contribute? Put in Column R. Add to get the totals
P1, Q1, and R1. Divide these by 12
to get the monthly costs, P2, Q2, and R2. |
| Pension |
P.
Payments/Year |
Q.
Spouse Contribution |
R.
Your Contribution |
| Yours |
|
|
|
| Your
Spouse |
|
|
|
Total |
P1
= |
Q1
= |
R1
= |
Monthly |
P2
= P1/12 |
Q2
= Q1/12 |
R2
= R1/12 |
|
Tips:
n• The basic
question to ask when choosing a retirement/pension plan is: “How
much money should I receive when I retire so that my family and
I can still live comfortably?” There are financial advisers
who suggest that you can still live comfortably if you receive 70-80%
of your salary before retirement. Calculate this. Call this amount
Z1.
n• Consult an
insurance agent and ask, “How much premium should I pay for
so many months and years so that I can receive Z1
amount of money when I retire?”
n• If you can
afford the premium, get the retirement/pension plan that will pay
out Z1 amount of money to you when you retire.
If you cannot afford the premium, ask your agent for pension plans
that you can afford. Again, make sure you choose a plan you can
afford.
n• For example
you are now 21 years old. Let us say you want to receive a lump
sum of more than PhP 2 million when you retire at 60 years old.
There are pension plans offered by insurance companies which will
give you a lump sum of PhP 2.2 million upon retirement for which
you just have to pay PhP 1,442 per month for 5 years. This means
you just pay a total of PhP 86,550 during those 5 years and you
get more than PhP 2 million when you reach 60.
n• Let us say
you want to use your money now for other things and you start paying
your pension plan only when you are 31 years old. You will get only
around PhP 800,000 when you retire at 60. So it is better to start
building your pension fund when you are still young. If you still
have extra money after paying off your pension plan in 5 years,
then you can buy another plan to give you more money when you retire.
n• A pension
fund is simply a pool of money that you build through regular savings.
The company you buy it from invests it so that it can grow substantially.
It is classified as a pre-need product and by itself is not considered
insurance. Again, it is advisable to buy retirement/pension plans
only from the best-performing insurance companies.
n• Encourage
your spouse (or your parents) to save for his/her retirement even
if he/she is earning less than you are. You can do this by “matching”
his/share with a contribution from you. For example, if he/she contributes
PhP 1,000/month to his/her pension, “match” it with
PhP 500 or PhP 1,000 aside from paying for your own pension. That
is, of course, if you can afford it. Your siblings should be the
ones responsible for their own retirement.
n• There are
now many insurance products that combine life insurance with pension
plans. Study these well and ask yourself the same questions as above
to help you choose the right product. The advantage of these combine
products is the ease of payment. For one payment, you get two benefits
– life insurance and you continuously build up your retirement/pension
fund.
|
