You’re earning, saving, making smarter choices and now you’re thinking about protection. That says a lot. You know insurance matters and you’re considering to get one but you’re just not sure if your budget can stretch for it.
The great news is that there are now many options in the insurance market that you can take advantage of. Variable Unit-Linked (VUL) plans or Investment-Linked insurance plans, which offer both protection and the opportunity to grow your money, have become more personalized and affordable. The key is finding the right balance between securing adequate protection for your loved ones while staying within your budget.
In this article, we’ve compiled five simple and practical steps to help you provide financial security for your family without making major changes to your lifestyle.
Key Takeaways
- Audit your monthly family expenses to determine how much you can allocate towards insurance coverage.
- Allot some time to research about various types of insurance plans and riders to enhance your protection without overspending.
- Anticipate potential risks and prepare accordingly to ensure all-around protection for you and your loved ones.
Step 1: Review your budget and reassess your monthly expenses.
Begin by listing all your monthly expenses and categorizing them into your day-to-day necessities. Carefully review your budget down to every peso starting from your weekly grocery shopping, electric and water bills, your children’s educational fund, and other expenses (including those for leisure). By doing this, you'll find it easier to identify items that can be adjusted or even removed and determine how much you can potentially save.
Tip: Apply the 50/30/20 budgeting rule to make things easier:
- 50% for needs (rent, food, bills)
- 30% for wants (leisure, shopping)
- 20% for goals (savings and debt payments)
If you really want to prioritize securing your family’s future, it won’t hurt to compromise on non-essentials. You can reduce your budget for shopping and other leisure activities and allocate the savings for your emergency funds, future savings, or purchasing a protection plan.
Doing this doesn’t mean eliminating all leisure, rather, it involves making thoughtful compromises by foregoing unnecessary expenses to achieve greater financial peace of mind.
Step 2: Set a realistic yearly insurance budget.
Now that you have an idea of how much money you can save by reviewing your monthly expenses, you can be more realistic about your insurance budget. You can purchase a plan by paying monthly, quarterly, or yearly, depending on the nature of your policy.
Typically, insurance is more affordable when you pay annually, so make sure to determine what type of payment schedule works best for you. If you receive bonuses or income from part-time jobs, you can use this to pay for your insurance upfront for a year.
If annual payment feels too overwhelming, you might want to explore semi-annual, quarterly, or monthly payment plans. These options allow you to break down the total premium into smaller more manageable installments, making it easier to incorporate insurance costs into your budget.
Another important reminder you should take by heart is to stay committed to paying for your plan. Don't let your money and effort go to waste by stopping payments halfway through. There is a significant chance that your policy will be forfeited, leaving you without protection. In addition, consistently paying your premiums on time and avoiding missed payments can lead to additional benefits with certain insurance products.
Step 3: Explore the range of insurance plans currently available in the market.
You might have heard about different types of insurance plans from your relatives or friends. While they may have different names, what sets them apart is the amount of coverage and the various types of risks they aim to protect you from. We’ve listed down three categories that you can refer to when looking for the right insurance plan for your family:
Life plans– These plans are designed to provide financial protection to your loved ones in the event of your passing. It comes in various forms, including term life, which offers coverage for a specific period. Another type could be a whole life plan where the insured is covered up to age 90. These plans can help cover living expenses, debts, and other financial obligations, ensuring that loved ones are supported in case of the insured's sudden demise.
Critical illness plans– These insurance plans are designed to provide a lump-sum benefit if the policyholder is diagnosed with a serious illness, such as cancer, heart attack, or stroke.
All-around insurance plans– These plans combine coverage for life, critical illness as well as accident and disability into a single policy. They eliminate the struggle of managing separate policies for different needs, while ensuring you are protected from different life risks.
Step 4: Review and compare options from different insurance providers.
When purchasing an insurance product, it is important to consider the overall background of the insurance provider. Research their credibility, performance history, and customer service online, or ask your friends and relatives for their experiences. If you wish to fully explore your options, it's advisable to speak with a financial advisor who can guide you toward the best financial solution. By doing this, you will have a better understanding of which plans are more affordable and offer more benefits for you.
Long past are the days when insurance was primarily for the wealthy, many insurance companies are now more proactive in offering products that cater to everyone. Recently, AXA Philippines launched its newest all-around VUL plan, AllShield. At a price point of ₱59*/day, you can get coverage for life, accidents, disability, and critical illnesses, keeping you and your family financially secure. It also goes with protection bonuses that increase your coverage further on the 10th and 20th years** of your policy. This is one of the plans you can consider if you want affordability and value for your money.
*Based on a regular pay plan of a 30-year-old female.
**Subject to terms and conditions
Step 5: Proactively account for future life events in your planning.
Life changes--like marriage, children, health concerns, or even retirement, can all affect your insurance needs. This is why it is important to plan for them early and adjust your insurance policies to adapt on your life's circumstances. Most importantly, talk to your financial advisor to review your coverage and adjust it as needed. Staying proactive and informed keeps your protection strong and your budget in check.
Finding the sweet spot
Securing a protection plan that fits your budget and needs is all about finding the right solution that is also affordable. By integrating various types of protection—such as life, accident, and critical illness insurance—into a single plan, you simplify your financial management. This holistic approach not only streamlines your coverage but can also lead to cost savings compared to purchasing separate policies. With an all-around insurance plan like AllShield, know you can maximize the value of your coverage while staying within your financial means.
Think you can afford and prioritize an all-around protection today? Talk to an AXA advisor to know more about AllShield and to get an expert advice.
