Life Insurance In The Philippines: Abroad Options Explored

If you're considering moving abroad, you might be thinking about putting together a financial plan that includes life insurance. If you're moving to the Philippines, you'll be glad to know that life insurance is available to foreigners, but there are some eligibility criteria and requirements you'll need to meet. In this paragraph, we'll give an overview of what you need to know about getting life insurance in the Philippines while living abroad.

Foreign nationals can get life insurance in the Philippines, but they must meet eligibility criteria and complete the application process

Foreign nationals can obtain life insurance in the Philippines, but they must meet specific eligibility criteria and complete the required application process. Here is a comprehensive guide detailing the requirements, procedures, and other relevant information for foreign nationals seeking life insurance in the Philippines.

Eligibility Criteria for Foreign Nationals:

• Legal Status: Applicants must possess a valid work visa or residence permit. Temporary visitors are typically ineligible to apply for local life insurance policies.
• Age: Most insurers set an age limit, usually between 18 and 65 years old, for the initial policy purchase.
• Employment: Employment status may influence the available policy types. Some insurers cater to the self-employed or retired foreign nationals with specialized plans.
• Financial Capacity: Insurers often require proof of income or financial capacity to ensure the applicant can pay the premiums. Documents such as tax returns or salary slips are generally accepted.
• Health: While not mandatory across all insurers, many companies require a health check-up or medical history report, which may need to be completed in the Philippines.
• Previous Insurance History: Some Philippine insurers may request information about any prior insurance coverage in the applicant's home country.
• Local Sponsorship: Having a local sponsor or contact can sometimes expedite the process and lead to more favorable terms.

Documentation Needed for Foreign Nationals:

• Passport: A valid passport is mandatory for identification purposes.
• Visa or Residence Permit: Documentation proving the applicant's legal status in the country is essential.
• Proof of Income: This can include an employment contract, recent pay slips, or a tax return form.
• Medical Records: Insurers may request medical records from either the applicant's home country or a medical examination conducted locally.
• Proof of Address: A utility bill or rental agreement is commonly accepted as proof of address.
• Additional Documents: Depending on the insurer, applicants may need to provide other documents, such as a Social Security Number (SSN) or its equivalent, letters of recommendation, or details of prior insurance policies.

Types of Life Insurance Available in the Philippines:

• Term Life Insurance: This type of insurance provides coverage for a specified term, typically ranging from 1 to 30 years. If the insured person passes away within the term, the death benefit is paid out to the beneficiaries. Term life insurance is generally more affordable, with premiums starting as low as PHP 1,000 per month.
• Whole Life Insurance: Whole life insurance offers coverage for the insured's entire lifetime, provided premiums are paid. It often includes a cash value component that grows over time. Premiums for whole life insurance are usually more expensive, starting from PHP 5,000 per month or higher.
• Variable Life Insurance: Variable life insurance combines life insurance with an investment component, offering the potential for higher returns but also carrying higher risks. The cash value of the policy is invested in various funds. The coverage period varies but often lasts a lifetime. Premiums for variable life insurance can be costly, often exceeding PHP 8,000 per month, depending on the investment options chosen.

Popular Insurance Providers in the Philippines:

The market features a mix of local and international insurance providers, each with its own policies, benefits, and costs. Here are some prominent options:

• Local Providers: Philam Life, Sun Life of Canada (Philippines), Insular Life, Manulife Philippines, and Pru Life UK – Philippines.
• International Providers: AXA Philippines, Zurich Insurance, and Allianz PNB.

Application Process for Foreign Nationals:

• Research and Comparison: Begin by researching various providers and their offerings through websites and online forums.
• Initial Consultation: Contact your chosen providers for an initial consultation, which some companies offer online.
• Document Submission: Submit all the required documents, typically including your passport, visa, and proof of income.
• Plan Selection: Based on the consultation and needs assessment, select the insurance plan that best suits your needs.
• Quotation and Underwriting: After submitting your documents, the insurer will provide a quote and may require additional underwriting.
• Premium Payment: Once the policy is approved, make the initial premium payment to activate the policy.
• Interviews and Health Checks: Some insurers conduct in-depth interviews to discuss the applicant's lifestyle, health condition, and financial status. Many insurers also require a medical exam, which can be done at a provider-approved clinic or by the applicant's chosen physician. The doctor then sends the medical report to the insurance company, which may adjust premiums or coverage based on the findings.

Premium Rates, Payment Methods, and Benefits:

• Premium Rates for Foreigners: Premium rates can vary significantly based on age, health status, and the chosen policy type. The initial premium, which activates the policy, typically ranges from PHP 1,000 to over PHP 8,000 per month, depending on the selected plan. Some policies may also have additional charges, such as administrative or investment fees for variable life insurance plans.
• Accepted Payment Methods: Most insurers accept local and international bank transfers, credit or debit card payments (Visa and Mastercard), online payment platforms (PayPal, GCash), cash or check payments (especially for annual premium payments), and salary deduction for employed individuals.
• Benefits and Coverage: The primary purpose of life insurance is to provide a death benefit, a lump-sum payment made to beneficiaries upon the insured's death. Some policies offer additional benefits, such as payouts for accidental death, critical illness, or permanent disability. Variable life insurance policies also offer the potential for investment returns, although they carry higher risks.

The government provides insurance for agency-hired overseas Filipino workers (OFWs)

The Philippine government has made provisions to ensure that Overseas Filipino Workers (OFWs) are adequately protected against accidents, illnesses, and death. The Migrant Workers and Overseas Filipinos Act of 1995 requires all agency-hired workers to be covered by a compulsory insurance policy known as the Agency-Hired OFW Compulsory Insurance (AHOCI). This policy is effective and mandatory for OFWs who have availed the services of a recruitment/manning agency authorised by the Department of Labor and Employment (DOLE) through the Philippine Overseas Employment Administration (POEA). The insurance is valid for the duration of their employment contract.

The AHOCI covers accidental death, natural death, permanent total disablement, repatriation costs, subsistence allowance, money claims, compassionate visits, medical evacuation, and medical repatriation. In cases of hospitalisation for seven or more consecutive days, the insurance company shall pay for the transportation cost of one family member to the nearest major airport. If adequate medical facilities are unavailable, the insurance provider must relocate the worker under appropriate medical supervision.

The insurance is secured by the recruitment agency, and employees are not required to pay any fees. The Philippine Overseas Employment Administration (POEA) has mandated that the insurance coverage is compulsory and free for agency-hired OFWs. This ensures that OFWs and their families are financially protected in the event of any unforeseen circumstances.

While the AHOCI provides basic protection, it is important to note that it is only applicable during the worker's employment period and does not cover direct-hired or name-hired workers. Therefore, it is beneficial for OFWs to consider additional independent life insurance to secure their future and protect their income from unexpected emergencies.

OFWs are encouraged to get additional life insurance to secure their family's financial future

Overseas Filipino Workers (OFWs) make sacrifices by working abroad to support their families and secure a better future. It is important for them to have financial protection and security for their future. Here are some reasons why OFWs are encouraged to obtain additional life insurance:

Protecting Income and Securing the Future

OFWs should be financially protected as they make sacrifices by living far from home and taking on risks. Life insurance provides security and peace of mind, ensuring their income is protected in case of unexpected emergencies. It acts as a safety net for their families, who rely on remittances from OFWs to sustain their livelihood.

Inadequacy of Compulsory Insurance

While the government has made provisions for compulsory insurance for agency-hired OFWs, such as the Agency-Hired OFW Compulsory Insurance (AHOCI), it is not sufficient. The AHOCI covers basic risks like accidental death, natural death, permanent total disablement, and medical evacuation, but it is only valid during the duration of their employment contract. Additionally, it excludes direct-hired or name-hired workers, leaving them without the same benefits.

High-Risk Occupations

Many OFWs are employed in elementary occupations, such as construction and factory work, which can put their health and safety at risk. Life insurance is essential to protect them and their families in case of any unforeseen incidents or health issues that may arise from their work.

Building Funds for the Future

Life insurance can help OFWs build funds over time through investment-linked insurance policies. These policies not only provide protection but also help grow their money through investment components. This enables OFWs to potentially retire with sufficient funds and secure their family's future.

Affordable Options

OFWs can find affordable life insurance options with easy application processes. For example, Paramount's OFW Balik Manggagawa Insurance offers comprehensive coverage, including permanent total disablement, accidental death, natural death, money claims, compassionate visits, and medical evacuation, for a reasonable price.

In conclusion, additional life insurance is a worthwhile investment for OFWs, providing financial security and peace of mind for themselves and their families. It ensures that their income is protected, and their families are taken care of, even in unexpected emergencies.

Life insurance costs in the Philippines depend on age, health, and income

Life insurance is a financial security measure that protects your loved ones' future. While it may be unattractive to some, as it requires paying premiums for several years before your loved ones receive any benefits, it can help secure your loved ones' financial future in the event of your untimely death.

There are several factors that influence the cost of life insurance in the Philippines. These include:

• Age: The policyholder's age matters when it comes to insurance premiums. Generally, life insurance products are age-banded, meaning that a policy gets more expensive as the years go by. The risk for an insurance provider to pay out the life insurance benefits increases with each passing year, resulting in higher premiums for older individuals. Therefore, it is advisable to purchase life insurance at a younger age, preferably in your 20s or 30s when premiums are likely to be cheaper.
• Health and Lifestyle: The insured person's health and lifestyle habits can also impact the cost of life insurance. Smokers, for example, tend to pay higher premiums due to the health risks associated with smoking. Similarly, individuals who engage in high-risk physical activities, such as mountain hiking or car racing, may face higher premiums as they have a higher likelihood of an accident or death. On the other hand, healthy habits such as regular exercise and a proper diet can help lower insurance premiums as they contribute to better overall health and a reduced risk of illness.
• Income: The Philippine Life Insurance Association (PLIA) suggests buying life insurance with coverage equal to 5 to 7 times your current annual gross income. The amount of coverage you choose will impact the cost of your premiums. Additionally, it is important to consider your financial situation and ensure you have enough emergency funds before purchasing life insurance. Life insurance should be viewed as a long-term investment to protect your future rather than a short-term solution for present needs.
• Type of Insurance: In the Philippines, there are two major types of life insurance: traditional life and variable life. Traditional life insurance focuses on guaranteed death and/or living benefits, while variable life insurance is investment-linked and offers the potential for higher returns. Within these main types, there are additional classifications, including term life insurance, whole life insurance, and endowment life insurance, each with varying costs and benefits.
• Family Medical History: When applying for life insurance, you may be required to undergo a medical exam and provide information about your family's medical history. If your family has a history of serious illnesses, such as cancer, diabetes, or heart disease, you may be considered a higher risk and face higher premiums.

It is important to carefully consider your personal circumstances, financial goals, and budget when deciding whether to purchase life insurance and determining the amount of coverage you need. Additionally, it is recommended to compare prices and coverage options from different providers before making a decision.

There are two main types of life insurance in the Philippines: traditional and variable

Yes, you can get life insurance in the Philippines while living abroad. Several companies offer expat life insurance plans, including Cigna Global, William Russell, and GeoBlue Xplorer. When choosing a life insurance company, it is important to ensure that they are licensed to operate in the Philippines and have a solid company background and strong financial performance.

Traditional life insurance can be further classified into three types: term life insurance, whole life insurance, and endowment. Term life insurance provides coverage for a limited or fixed number of years, and is generally less expensive compared to other types. Whole life insurance covers the insured until their death and typically has higher premiums. Endowment life insurance offers guaranteed living benefits, such as periodic payouts or a lump sum upon maturity, in addition to protection.

When deciding on the type of life insurance that suits your needs, it is important to consider factors such as the desired insurance coverage, the duration of coverage, affordability, and whether you want protection only or additional savings as part of your policy.

Frequently asked questions