Looking to purchase insurance coverage? Read on to find out if a term life insurance is good fit for you.
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What is term life insurance?
Term life insurance gives coverage for a length of time. The length of time that the coverage is valid is also called term, hence its name.
What is widely available is the one-year term life insurance. Among the products that are listed in this article, the term can be as short as three months or as long as ten years.
In its simplest form, it provides a cash benefit upon the untimely death of the person insured—of course, subject to conditions set by the life insurance company and Philippine laws—for as long as the premium is paid and the contract remains valid.
Additionally, it can be customized and its coverage can be expanded by adding insurance riders.
Term life insurance versus whole life insurance
The main difference between term life insurance and whole life insurance is the length of time of the coverage.
The coverage in term life insurance is limited to months or longer and after which it has to be renewed. On the other hand, whole life insurance provides lifelong coverage for as long as the premium is paid.
Because term life insurance has a shorter period of coverage, it is arguably cheaper than whole life insurance.
Moreover, a term life insurance offers simple protection. It provides the beneficiaries with a cash benefit (called sum insured) upon the death of the person insured.
Meanwhile, whole life insurance may offer other benefits including cash payout (such as an endowment plan) or an investment to grow savings (such as VULs).
This is another reason why term life insurance can be cheaper as it does not have any extra benefits or coverage.
Who can buy term life insurance?
Just like any other insurance plan, a term life insurance is available to people who are considered insurable. Generally, the measure of how insurable a person is will be based on health status, medical history, occupation, hobbies, etc.
One other important factor in buying term life insurance is the issue age. Issue age defines how old the person insured has to be by the time the plan is taken out. So being too young or too old may be a reason that an application can be denied.
Based on the term life insurance plans listed below, some plans allow an application for insurance for a two-week old baby or a 79-year old individual.
Renewal of term life insurance
When the term is up, the protection given by the term life insurance is no longer valid and may need to be renewed to keep the coverage going.
The ability to renew depends on several factors such as the the age of the person insured and the insurance contract.
Based on similar products available in the Philippines mentioned in this article, the age that it can be renewed falls in the range between 64 years old and 99 years old. If you are older than the age limit set by the plan, it cannot be renewed anymore.
On top of that, each time the plan is renewed is subject to an increase in premium in order to enjoy the same coverage.
This is so because growing older presents a higher risk that an insurance claim is going to be made. Older people have an increased chance of getting ill or dying compared to people of younger age.
The good thing is that almost always no medical examination may be required when renewal of the term life insurance comes around.
Advantages of term life insurance
What are the advantages of purchasing a term life insurance? These are the benefits based of the features of the term life insurance products available in the Philippines.
- It is comparably cheaper and it can provide the most coverage for your money.
- It may be suitable to people who are looking for plain coverage and without any extras.
- By saying that, its coverage can be customized and expanded by attaching insurance riders. Insurance riders can financially protect from uncertainties in life such as accident, critical illness, hospitalization.
- One insurance in the list below can have an investment component by adding a variable rider.
- There may be no need to undergo medical exams upon renewal of the plan.
- Different terms are available from several months, one year, or longer.
- It can be converted into a whole life insurance which can be a good option down the road later on.
- A number of insurers offer family plans. A parent can be the primary person being insured and they can add their spouse and/or children to the plan.
- Several term insurance products are sold online. With just a few clicks of the button, people can get insured without having to talk to an insurance agent. Renewing the plan can also be done online.
- Insurers offer variants of the same plan, making available a choice to buy higher coverage with higher premium.
- A term life insurance forms part of a financial strategy called “buy term, invest the difference.” This strategy enables a person to get insurance at affordable rate and then to invest spare cash to generate extra income.
Disadvantages of term life insurance
What are the disadvantages of purchasing a term life insurance?
- Issue age sets the range of ages of people who can buy the plan. Individuals who are either too young or too old (beyond the limit set by the issue age) may not be able to make a purchase.
- The cost of enjoying the same level of coverage is higher every time the plan is renewed.
- The ability to renew stops at a certain age of the person insured. It can be a concern particularly at an advanced age when individuals need insurance coverage the most.
- Unlike whole life plans, there is no cash value attached to the plan.
- Addition of insurance riders may mean higher premium.
List of term life insurance plans in the Philippines
Below is the list of term life insurance plans that are available in the Philippines. Please note that this list is exclusive to plans that are sold for individuals, so group plans are not mentioned.
| Name | Details |
|---|---|
| Guardian | Benefit: Life insurance Insurer: AIA Philippines Issue age: 18 to 79 years old Renewable: Until 85 years old Riders: Accident, Waived premiums, Daily hospital allowance Terms: 1 year, 5 years, 10 years, or until age 65 |
| Term Secure 5 | Benefit: Life insurance Currency: PHP and US dollars Insurer: BDO Life Issue age: 20 to 65 years old Renewable: Until age 64 years old |
| Life Protect | Benefit: Life insurance Insurer: BPI AIA Issue age: Depends on variant (between 18 and 79 years old) Premium: Depends on variant (single pay, 5-pay, 10-pay) Payment mode: Depends on variant (annual, annual or semi-annual) Terms: 1 year, 5 years, 10 years |
| Pamilya Protect | Benefits: – Life insurance – Accidental death, dismemberment, disability – Daily hospital income benefit How to buy: PamilyaProtect Facebook Messenger Insurer: BPI AIA Issue age: 18 to 64 years old (main insured) Issue age: 18 to 64 years old (adult), 14 days to 21 years old (minor) Term: Annual renewable term |
| Yearly Renewable Term | Benefit: Life insurance Insurer: Country Bankers Life Insurance Company Term: 1 year |
| 10 Year Term | Benefits: – Life insurance – Accidental death – Waiver Benefit Currency: Peso Insurer: First Life Issue: 20 to 60 years old Term: 10 years |
| Annually Renewable Term | Benefits: – Life insurance – Accidental death – Waiver Benefit Currency: Peso Insurer: First Life Issue age: 20 to 59 years old Term: 1 year |
| Annual Renewable Term Insurance (ART) | Benefits: Life insurance Insurer: Fortune Life Issue Age: 18 to 55 years old Premium: One-time pay Riders: Accidental death benefit, Waiver of Premium upon Disability Term: 1 year |
| 5-Year Renewable Term Insurance (5-YRT) | Benefits: Life insurance Insurer: Fortune Life Issue Age: 18 to 55 years old Premium: Annually, semi-annually, quarterly or monthly. Riders: Accidental death benefit, Waiver of Premium upon Disability Term: 5 years |
| 10-Year Renewable Term Insurance (10-YRT) | Benefits: Life insurance Insurer: Fortune Life Issue Age: 18 to 60 years old Premium: Annually, semi-annually, quarterly or monthly. Riders: Accidental death benefit, Waiver of Premium upon Disability Term: 10 years |
| 3-in-1 Protection Insurance Plan 5397 | Benefits: – Critical illness – Life – Accidental death – Covid protection How to buy: Through website Insurer: FWD Life Issue Age: 18-50 Renewable: Until age 55 Term: 1 year |
| KanLive Life Insurance Plan 1799 | Benefits: Life insurance How to buy: Through website Insurer: FWD Life Issue Age: 18-50 years old Renewable: Until age 55 Term: 1 year |
| Set for Tomorrow – Short Term Cover Digital Life Insurance | Benefits: – Life insurance – Overseas benefit – Funeral benefit – Spouse extension benefit – Terminal illness benefit How to buy: Through website Insurer: FWD Life Issue age: 25 to 55 years old Premium mode: annual, quarterly Term: 1 year |
| The One (for Life, for music lovers) | Benefits: – Life insurance (renewable until age 99) – Critical illness (renewable until age 79) – Accidental death benefit (renewable until age 79) Coverage: 1 year How to buy: Through website Insurer: FWD Life Issue Age: 18-70 Term: 1 year |
| The One | Benefits: – Life insurance (renewable until age 99) – Critical illness (renewable until age 79) – Accidental death benefit (renewable until age 79) Insurer: FWD Life Issue Age: 18-70 years old Term: 1 year |
| 365 Ready Life | Benefits: Life insurance Coverage: 1 year Currency: Peso How to buy: Through website Insurer: Manulife Issue Age: 18-45 Term: 1 year |
| Yearly Renewable Term | Benefits: Life insurance Cover age: Until age 69 years old or for 10 years Insurer: Manulife Rider: Critical illness Term: 1 year |
| React5 | Benefits: Life insurance Cover age: Until age 80 years old Insurer: Manulife Rider: Critical illness Term: 5 year |
| Base Protect | Benefits: Life insurance Insurer: Manulife China Bank Rider: Critical illness Term: 1 year |
| Base Protect Plus | Benefits: Life insurance Insurer: Manulife China Bank Rider: Critical illness Term: 5 year |
| Prime Term | Benefits: Life insurance Insurer: Paramount Life Issue Age: 5 to 60 years old Premium mode: Annual, semi-annual, quarterly, monthly Term: 5 years and 20 years |
| FlexiProtect | Benefits: Life insurance Insurer: Philippine AXA Riders: Care Rider, Critical Conditions Rider, Secure Rider, Waiver of Premium Rider Premium mode: Annual, semi-annual, quarterly, monthly Term: 5 years |
| PRULife Your Term | Benefits: Life insurance Insurer: PRU Life Issue age: 7 days to 79 years old Renewable: Up to 89 Years old Riders: Accelerated Total and Permanent Disability, Waiver of Premium on Total and Permanent Disability, Accidental Death and Disablement, Personal Accident, Payor Waiver, Variable Life rider that can attach an investment component to the plan Term: 1 year |
| PRU Term 15 | Benefits: Life insurance Insurer: PRU Life Issue age: 18 to 65 years old Riders: Accelerated Total and Permanent Disability, Waiver of Premium on Total and Permanent Disability, Accidental Death and Disablment, Personal Accident, Life Care Benefit, Life Care Waiver, Hospital Income Term: 15 years |
| PRUShield | Benefits: – Life insurance – Daily hospital income benefit Issue age: 18 to 64 years old Insurer: PRU Life Renewable: Up to age 65 years old Riders: Accelerated Total and Permanent Disability, Waiver of Premium on Total and Permanent Disability, Accidental Death and Disablement, Personal Accident, Life Care Benefit, Life Care Waiver, Hospital Income Term: 1 year |
| SeaInsure Life Cover | Benefit: Life insurance, Accidental death Insurer: SeaInsure Issue age: 18 to 49 years old |
| SeaInsure Ladies Cover | Benefits: – Life insurance – Accidental death/total disability/medical expenses – Loss of income due to accident confinement – Cosmetic surgery and dental treatment – Death due to pregnancy disorder or complications – Miscarriage due to Accident Insurer: SeaInsure Issue age: 18 to 45 years old (Female) Term: 3 or 12 months |
| SeaInsure Kids Cover | Benefits: – Life insurance – Accidental Total Permanent Disability/Medical Expenses Insurer: SeaInsure Issue age: 15 days old to 17 years old Term: 3 or 12 months |
| SeaInsure Elder Cover | Benefits: – Life insurance – Accidental Total Permanent Disability/Medical Expenses Insurer: SeaInsure Issue age: 61 to 70 years old Term: 3 or 12 months |
| Sun Grepa Pro Term | Benefits: Life insurance Insurer: Sun Life Grepa Premium mode: Annually, semi-annually, quarterly or monthly Renewable: Up to 75 years old |
How to buy term life insurance
Here are some tips in buying term life insurance.
Insurance needs
Firstly, you have to check your insurance needs. Avoid getting over- or under-insured so that you can make sure that you get the most protection from your money. Your insurance needs will depend on many things such as number of dependents, debts, etc.
Then see if your insurance need can be addressed either by taking out a term life insurance or a whole life insurance.
Look around
You can check the table above for a list of choices. Assess whether the plan has reasonable premium. Check too what coverage it provides, the insurance riders that can be activated, issue age, the age it can be renewed, etc.
One other factor is the insurance provider. See if you can get a plan from a trusted insurance company with good reputation, excellent customer care, and the ease in doing business such as keeping track of the plan, paying its premium, and renewing.
You may also need to see whether you can purchase the plan online or through an duly licensed insurance agent.
Prepare the requirements
You may be asked to provide a valid identification card and the amount required for the first premium payment. Other required files may be asked such as medical certificate, disclosure of treatments received, etc.
Apply for insurance
You may then proceed to apply for insurance. If you are doing this online, check to see the online forms that need to be filled out and the files that may have to be upload. If you are applying for coverage through an insurance agent, set a meeting so you can submit the required files and sign the application form.
You can wait for the approval of insurance. An insurance contract may be given to you (an e-copy sent to email for online application or a printed copy if applied through an insurance agent).
Manage your coverage
Keep an eye on renewal date and ensure that you get to renew the plan and pay the premium on time. You may also want to talk to someone from the insurance provider if you think there is a need to convert to a permanent plan.