A lot of you when you invested in life Insurance may have read the summary of your protection but have not fully understood the benefits of your protection package. Hopefully, as we unpack some details on this blog, this will help you maximize your insurance benefits.
Which one of you when you applied for insurance coverage whether health, car, property insurance or life insurance has read the booklet of agreement or the contract in detail. It's funny because I have asked my group of friends, and literally they said that they don't even know the details of each. They just have it and they pick up the booklet when they need help. I believe if you want to maximize the benefits of your Life Insurance it's time for you to read through.
1. Check the health coverage
Why did you purchase health insurance in the first place? Whether you like it or not, you have subscribed to something in which there is an exchange of goods. So you got to check it out! If you purchased insurance for your health protection make sure that you know its full content. Does the plan cover when you get hospitalized or does it only take effect only when you are diagnosed with a critical illness? This can be tricky.
So, check your copy or contact your financial consultant if you do not understand your plan benefits. If you are my client please contact me on the details below. Let's take a look at critical illness. These are specifically designed plans only for critical conditions. The list below is just a sample from one of the plans under Sun Life Financial.
Here is an excerpt from the Sun Life plan coverage: " If the life insured has been diagnosed, while living, to have contracted any one or more from the different groups of the following Critical Illnesses as listed and/or has undergone any of the specified surgeries, then you will receive a percentage of Protection Amount. The percentage will be based on the following: 20% for Minor CI, 10% for Angioplasty Benefit, and 100% for Major CI less any Minor CI and Angioplasty Benefit, subject to applicable provisions. The diagnosis of any Critical Illness must occur more than 90 days after the date the policy comes into force."
2. Use Riders
Also, you can maximize the benefits of your insurance protection by adding riders to your coverage. Riders are add-ons benefits on your plan which has added cost. For example, there are plans that can be added with Hospital Income Benefits. This is a huge help to your protection when you encounter hospitalization. It pays a daily amount of coverage depending on your desired amount of protection. With Sun Life, there is a required 3-days confinement in the hospital to be able to file a claim for Hospital Income Benefits.
4. Tap up on Investments
Investment is a huge factor in why most of my clients have invested in VUL-linked Insurance protection plans. Aside from Insurance protection, most of them aims to use the investments for the retirement and or education of their kids. Using investment earnings you can fully maximize your insurance benefits. For my clients, using the VUL plans they have opportunities to analyze their risk appetite and change their fund allocation 4 times in a year. If you are looking for investment modules to study dont hesitate to let me know and lets talk about your plans.
5. Enjoy Non-Taxed Benefits
Here is the big deal. Most of you do not know this so pay attention to fully maximize your policy. According to National Internal Revenue of 1997 Section 32 Gross Income The following items shall not be included in gross income and shall be exempt from taxation under this Title:
"Life Insurance. - The proceeds of life insurance policies paid to the heirs or beneficiaries upon the death of the insured, whether in a single sum or otherwise, but if such amounts are held by the insurer under an agreement to pay interest thereon, the interest payments shall be included in gross income."
For some reasons if you have forgotten about this when you signed your application form, there is an important reminder from your advisors which comprises of revocable and non-revocable understanding on the policy. In summary of the excerpt of the BIR Section 32, the policy shall not be taxable if the claiming beneficiaries' status is non-revocable. If you have not reviewed this part of your policies with your financial advisors please contact them immediately.
Now have you felt like you have not fully maximized your plan? Contact your financial consultant now, and be recharged by reviewing your policies and see for yourself how can you make some adjustments to your plan. If you act now, I am sure moving forward, whatever happens working out some of the benefits above we can surely maximize the use of our life insurance protection plan.
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Hi, my name is Jack, I am a financial coach for over 4 years now. My goal is to help thousands of Filipino people understand and embrace the spirit of financial preparation through our program, "Financial Freedom". I know you need help but you just don't know where to start. Allow me to help you establish a brighter future. Click below for more information. Check what I have been doing here.
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