What the pandemic taught us about having insurance

MANILA, Philippines — The pandemic helped people see the true value and benefit of insurance. Personal finance management has become a bigger priority, with financial products now deemed more important than ever – at par with other common household expenses.

However, most Filipinos are either uninsured or underinsured, making them vulnerable to the financial impact of unexpected events such as illnesses and natural disasters. This was further aggravated by the pandemic, which caused a great deal of financial burden to many.

Among the many effects of unforeseen circumstances like those is the way the long-term goals of individual Filipinos have been put in danger. Goals for retirement or opening their own business, setting up funds for their children’s education—have been derailed, causing a great deal of stress and uncertainty for many.

“Filipinos usually know about life insurance and that one has to die in order for them to benefit from it. It is important to understand that there are many types of insurance and these all have different ways to protect us and our loved ones,” shared AXA Philippines President and CEO Rahul Hora.

“Being underinsured means that a crisis such as death, major illness, accident or disaster causes a drastic change in the standard of living for those who remain. Having the right type of insurance that is aligned with what we want to protect is crucial to mitigate the risks and potential burden involved with underinsurance,” he added.

Insurance as a means to protect your future

A common misconception that Filipinos have is that having life insurance and having investments for future goals should always be two separate things, according to AXA Philippines Chief Investment Officer Anthony Garces. However, one can get the best of both worlds in the form of a Variable Unit-Linked Insurance or VUL.

“VULs are first and foremost a life insurance product which offers benefits in case of death. However, its unique feature is that a portion of the premium—the amount you pay for your insurance—is invested by the company, which can be utilized to achieve long-term goals,” shared Garces.

Before getting into VULs for the first time, Garces advises potential investors to first consider what their goals are. Is it for their retirement? Educational needs of their children? Future business? Knowing the end goal will help determine a person’s investment horizon or the target time to remain invested.

Next is to understand one’s risk tolerance. Financial institutions would normally present questions that will help determine a client’s risk profile and understanding of investment products. Knowing their risk profile will help determine the asset class or type of fund suitable for an investor.

One’s risk profile, simply put, is one’s willingness or ability to take risks or possibly, even loss.

Lastly, new investors should also read about or learn basic investment concepts and consult investment professionals such as financial or legal advisors, before making the actual investment.

Make sure to carefully read fund documents, including the fine print and disclaimers, in order to make informed decisions before investing hard-earned money. Never dive into investments without understanding their basic principles, as this may cause more harm than good when it comes to planning for the future.

Once a person is confident enough to invest, it is best to look into products that have features that are tailor-fit for their specific goals. Products that offer various forms of flexibility are preferable, such as those that let you personalize and increase your coverage.

Another feature worth considering is if the VUL offers a range of professionally managed funds where you can choose to invest your money, both locally and globally.

Lastly, a noteworthy feature is when there are options for supplementary benefits such as daily hospitalization income, additional protection coverage or education protection coverage.

These features and more can all be found in AXA MyLifeChoice, a protection and investment plan that offers policyholders the freedom and flexibility to select the investment that fits their priorities, risk appetite, and budget.

“Having a VUL product is more than just a monetary investment, it is also a means to protect ourselves and the people we love, both during the pandemic and beyond,” said Garces.

“The future may be uncertain, but how we prepare during the present can help turn the tides in our favor in case the going gets tough once again,” he concluded.

To know more about AXA MyLifeChoice, visit https://www.axa.com.ph/mylifechoice.