What OFW Needs to Know About Life Insurance


If you are an OFW with dependents, life insurance is an essential aspect of financial literacy. Truth be told, life insurance is a basic need and a good lifetime financial partner. However, with a small segment of general population who has insurance, no wonder many Filipinos are not protected.

In fact, only about two percent of the Philippine populations have bought Life Insurance for themselves. Another ten percent are covered by their companies, according to Mylene Lopa, Chief Marketing Officer of Sunlife Philippines.

Generally, the point of insurance is to protect against losses that would be financially catastrophic to you in relation with your future income, business, and health. For instance, in the event that you suffered from long-term disability and you are no longer capable of working, the long-term disability insurance will handle this type of situation.

In addition, the high medical cost can easily ruin your savings or income if you don’t have insurance.  Sad to say, many people suffered from different kinds of diseases such as heart disease, diabetes, hypertension, and many more. For instance, cancer is common nowadays. Some people are suffering from strokes and other debilitating diseases even at a younger age.

Families have spent huge amount of money for medication and hospitalization. Insurance can be of great help especially if you have five little children and a fulltime housewife who is financially dependent on your earnings during your untimely demised. If you are running a business, liability insurance can protect you from like fire, floods, and other related catastrophic events.

Seek advice from financial planner or financial adviser and find out which insurance product suits your needs and budget. Ask yourself whether you are capable of paying the policy in a certain period of time. Most insurance companies offers monthly, quarterly, or even annually as their mode of payments.

Types of Life Insurance Products

I bought an insurance product (which I pay quarterly) the last I went back to the Philippines. It is a variable universal life insurance with a combination of both protection and investment component. Meaning, your contribution will put either in equities or mutual funds so it will grow overtime.  Let me share with you the four types of insurance products you have to explore depending on your budget and goals.

  1. Term insurance

These are the characteristic of term insurance- cheapest protects specified period of time, purely insurance protection, does not earn cash value, pure protection, and recommended for SMEs.

What if nothing happens, would the money you have been contributed means it’s being wasted? Not really. The peace of mind you have gained is incomparable with money.

  1. Whole-life insurance

These are the characteristic of whole-life insurance—you are protected for whole life, it does earn cash value, you don’t have to die to get anything, it is like savings and insurance at the same time.

This insurance is basically ideal and recommended for breadwinner who has dependents because it also earns cash value. Meaning, you don’t have to die and have accident before you claim it because the policy is a combination of investment.

  1. Endowment Insurance

These are the characteristic of endowment insurance– life insurance plus savings, mixed of whole and term insurance, endowment product has fix term but earns cash value.

  1. Variable Universal Life Insurance

These are the characteristic of VUL– life insurance with investment plans like stock and a bond which has a potential to earn, beat inflation, and protected at the same time. VUL is quite common or getting popularity nowadays aside from whole life insurance. This type of insurance is recommended if you want to grow your wealth over time.

Final words

Do OFWs need life insurance? Bell S. Tiongco, Senior Vice President Pru Life UK emphasized that the main difference between Filipinos and foreigners is that foreigners see life insurance as a basic need while Filipinos see it as a “good to have”. “We must start to recognize that life insurance is a basic need. Insurance coverage is part of financial planning.”

Therefore, my suggestion is to explore the benefits of a life insurance plan even before you leave or while having a vacation in the country. The law requires life insurance applicant to be physically present in the Philippines to fill up the application forms and affix his signatures to the documents. Once you decided to purchase the insurance product, update and upgrade your coverage every time you are in the Philippines.

Lastly, always remember that investing in your health is one of the best forms of investment as health is wealth.

I was young and now I am old, yet I have never seen the righteous forsaken or their children begging bread. –Psalm 37:25 NIV

To get to know more of life insurance, stock market and everything in between, visit Sir Jun’s blog at RichlyBlessedToday.

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Jun Amparo

Jun Amparo

JUN AMPARO is the author of two inspirational books about personal finance and marriage.  He is nominated as Huwarang OFW 2019 organized by The 700 Club Asia and is pursuing his doctoral study in education. Presently, he is working as a university counselor and lecturer at Asia-Pacific International University in Thailand.