Decoding Insurance Policies for Your Family's Protection

First off, let me send you a big virtual high-five for making it through another week of juggling family life, work commitments, and financial planning! You're doing an amazing job, and we're here to keep supporting you in your journey.

Last week, we delved into the world of investing, a key element of our Financial Commandments. We learned that investing is not just about stashing money away, but about strategically planning for the future.

But what happens when life throws us unexpected curveballs?

That's where this week's commandment comes in - INSURANCE.

Now, I must admit, insurance isn't my favorite topic. It's complex, it's often confusing, and let's face it, who likes thinking about worst-case scenarios?

However, it is essential. There are different types of insurance that cater to various aspects of our lives. Let's break them down:

1. 👨‍👩‍👦 Life Insurance

This is designed to provide for your loved ones after your passing. But let me share something personal here. I've had a rough ride with life insurance with an investment aspect.

My investments didn't grow as expected, and I even lost 50% of my contributions over the past five years. Plus, the fees are outrageous if you withdraw before maturity. So, while life insurance has its place, it's not always the best fit for everyone.

@yourmamaisrich

Let’s dive deeper.

Life Insurance: What It Is and Why It Matters

 Life insurance is a contract between you and an insurance company. You make regular payments (known as premiums), and in return, the insurer promises to pay a set amount to your beneficiaries upon your death.

Sounds simple, right? But why does it matter?

Having life insurance means you're proactively preparing for life's unexpected events. It's a way to ensure that your loved ones will be financially taken care of if something happens to you.

Types of Life Insurance

There are two main types of life insurance: term life insurance and whole life insurance.

• Term Life Insurance provides coverage for a specific period or 'term.' If you pass away during this term, your beneficiaries receive the death benefit. It's usually less expensive than whole life insurance.

• Whole Life Insurance provides lifelong coverage and has a cash value component that grows over time. It's more expensive but can serve as an investment or savings tool.

Choosing the Right Life Insurance

When choosing a life insurance policy, consider these factors:

• Your family's financial needs: How much would your family need to maintain their lifestyle if you were no longer around?

• Your budget: Can you afford the premiums? Remember, life insurance should provide peace of mind, not financial stress.

• The insurer's reputation: Are they reliable? Do they have positive reviews?

Let me tell you why I favor Term Life Insurance.

2. ✈️ Travel Insurance

Oh, the memories! Last year, we traveled amidst the COVID-19 pandemic, and my daughter had an accident requiring surgery. Thanks to our travel insurance, all medical expenses were covered. We used expat insurance, particularly Regency for Expats, because of our mixed Filipino-Canadian family, giving us a hefty coverage of around 1 million USD. If you are considering trying Regency, let them know Kathy Hingan sent you! Haha!

3. 🚗 Auto Insurance

This protects you against financial loss if you have an accident. It's essentially a contract between you and the insurance company.

One common question that arises is:

The answer is not as straightforward as it seems. Let's break it down:

Auto Insurance and Claims

When you're involved in an accident, your auto insurance is there to cover the costs associated with that incident, depending on your policy details. But what happens to your premiums?

The Impact of Claims on Premiums

In general, if you're at fault in an accident and you make a claim, there is a likelihood that your auto insurance premiums may rise. This is because the insurance company may perceive you as a higher risk.

The increase in premium varies based on factors such as your driving history, the severity of the accident, and the specifics of your insurance policy.

However, it's important to note that this isn't a hard and fast rule. Some insurance companies offer accident forgiveness programs, where your first at-fault accident won't result in a premium increase.

Preventive Measures

To avoid premium increases, consider these tips:

1. Safe Driving: The safer you drive, the less likely you are to have an accident and need to file a claim.

2. Deductibles: Choosing a higher deductible can lower your premium, but remember, this means you'll pay more out-of-pocket if an accident occurs.

3. Discounts: Many insurance companies offer discounts for things like safe driving, bundling policies, or installing safety devices in your vehicle.

4. Accident Forgiveness: Consider policies that offer accident forgiveness to protect against premium increases.

4. 🏠️ Mortgage Insurance 

This helps cover your mortgage payments if you can't work due to a medical condition or lose your job.

Mortgage Insurance & Foreclosure

 Foreclosure is the legal process by which a lender seizes and sells a home or property when a borrower is unable to meet their repayment obligation. It's a situation that no homeowner wants to find themselves in. But fear not, supermoms! This is where mortgage insurance, particularly Mortgage Redemption Insurance (MRI), comes into play.

Mortgage Redemption Insurance (MRI)

In the Philippines, MRI is often required by banks and lending institutions. It's designed to protect your home from foreclosure by covering your outstanding debt if you pass away. Essentially, it ensures that your loved ones won't lose their home if something happens to you.

While it might seem like an additional expense, MRI can provide peace of mind knowing that your family's home will remain theirs, regardless of life's unexpected turns.

Finding the Right Mortgage Insurance

When choosing an MRI policy, make sure to shop around and compare different policies. Look out for factors such as:

• The coverage amount: Does it match your loan balance?

• Premiums: Are they affordable and within your budget?

• Terms and conditions: Do they suit your needs and circumstances?

5. 💡 Utility Bills Insurance/Bills Protect

For those who like using their e-wallets like Gcash or Maya, there is an option to get bills protect to make sure your payments are received by the merchant.

I personally use Gcash to pay my bills most of the time because they offer this specific feature.

If you missed utility payments before because of tech glitches, bills protect will make sure that you get your money back.

Insurance may not be the most exciting topic, but it plays a critical role in our financial wellness. It safeguards us from those unplanned life events that could otherwise leave us in a financial bind.

Remember, supermoms, it's not just about earning and saving, but also about protecting our hard-earned money. As we navigate this journey together, let's continue to empower each other to make informed decisions and build financial abundance for our families.

Stay safe, stay insured, and stay fabulous!