PROTECTING YOUR WEALTH

• is an agreement whereby one undertakes for a consideration to indemnify another against loss, damage or liability arising from an unknown or contingent event.

  contract of insurance
• An insurance policy is a contract between an institution or insurer and a policyholder where the policyholder agrees to pay a set amount at specific times while the institution or insurer guarantees monetary benefit upon the passing of an event as stipulated in the contract.
• Functions of Insurance

  provides certainty

  Provides Capital

  provides protection

  Risk-Sharing

  Improves Efficiency

  helps Economic Progress
• The purpose of life insurance is to provide financial protection to surviving dependents after the death of an insured. It is essential for applicants to analyze their financial situation and determine the standard of living needed for their surviving dependents before purchasing a life insurance policy. Life insurance agents or brokers are instrumental in assessing needs and establishing the type of life insurance most suitable to address those needs.
• 3 Types of Insurance

  Life Insurance

  Non-Life Insurance

  Reinsurance
• Types of Life Insurance

  Term Life

  Endowment

  Whole Life

  Variable Unit-Linked
• insurance on human lives and insurance appertaining thereto or connected therewith

  Life Insurance
• This is the most straightforward type of life insurance where the beneficiaries will receive a lump sum amount if the insured passes away during the term coverage. It has low premiums and the policy is easy to understand. However, there are no benefits for the policyholder if they outlive the term coverage.

  Term Life
• covers the insured for their entire life or until they reach 100 years old. It also acts as a savings vehicle since a portion of the premiums will be allocated for cash funds. While premiums are higher and prices are fixed, payment terms are more flexible.


  Whole Life
• This is a popular type of insurance policy that combines life coverage and investment opportunities. Many prefer this simply because it has benefits for the insured while they are alive. Investment fees are paid for on top of the insurance premiums, and the death benefit and cash funds will depend on the performance of the investment.

  Variable Unit-Linked
• covers things not covered by life insurance

  non-life insurance
• Types of Non-life Insurance

  Car

  Home

  Fire

  Travel

  Health
• is a policy that provides compensation for losses incurred from a specific financial event. This type of policy is also known as general insurance, or property and casualty insurance. Examples of non-life insurance policies include automobile policies, home-owners policies, damage cover from fire, marine accidents, travel, theft and any catastrophe etc.

  Non-Life Insurance
• T or F

  A person can have more than one type of non-life insurance.

  T
• This type of life insurance policy awards a lump sum to the policyholder after a particular time or upon death. The insured will pay the premiums for a lock-in period or until they reach a specific age. Premiums are higher for this type, but the policy owner is granted returns upon its maturity.

  Endowment
• covers the insured for their entire life or until they reach 100 years old. It also acts as a savings vehicle since a portion of the premiums will be allocated for cash funds. While premiums are higher and prices are fixed, payment terms are more flexible.


  Whole Life
• This is a popular type of insurance policy that combines life coverage and investment opportunities. Many prefer this simply because it has benefits for the insured while they are alive. Investment fees are paid for on top of the insurance premiums, and the death benefit and cash funds will depend on the performance of the investment.

  Variable Unit-Linked
• has traditionally been viewed as a season of life when one can relax and enjoy himself after a long career in the workforce. For some that vision includes spending time with family and friends, travel, volunteering, or even working part-time.

  Retirement
• With a little planning and a solid foundation of financial wellness, working forever doesn't have to be his retirement reality!
• is the process of determining retirement income goals and the actions and decisions necessary to achieve those goals.

  retirement planning
• Retirement planning includes identifying sources of income, estimating expenses, implementing a savings program, and managing assets and risk. Future cash flows are estimated to determine if the retirement income goal will be achieved.
• Retirement planning is ideally a life-long process. One can start at any time, but it works best if he factors it into his financial planning from the beginning.
• 3 Stages of Retirement Planning

  First Stage: Aggressive Wealth Accumulation and Growth (Age 21 to 35)

  Second Stage: Continued Asset Growth (Age 36 to 50)

  Third Stage: Pre-Retirement (Age 51 to 60)
• This is the phase when retirement planning is at its easiest. In the early 20s to mid-30s, one is starting his career with just a little money to save and invest. There’s not much pressure yet because he’s just starting to save money for retirement. However, the biggest advantage as a young adult is the time one has to grow his money before he retires.

  First Stage: Aggressive Wealth Accumulation and Growth
• Even if they are earning more than when they are younger, people in their early midlife face tough financial challenges, from raising a family to paying off mortgage. Despite financial setbacks in the late 30s to early 50s, it’s still important to keep setting aside money for retirement. Even if sending children to school or paying down debts is the priority right now. At this stage of retirement planning, one still has time to grow his savings.

  Second Stage: Continued Asset Growth
• With less than 10 years away from retiring, one has a clearer idea of how much he has saved and how much he’ll actually need to cover his post retirement living expenses. By this time, he’s likely to have major expenses like children’s college tuition, home mortgage, and other debts paid off, leaving him with more disposable income to save.

  Third Stage: Pre-Retirement
• Financial experts recommend saving 10% to 15% of income for retirement, starting in early 20s. That’s the ideal scenario. However, not everyone begins building their retirement fund at age 20. If one starts in his 40s or 50s, saving only 10% of his income will never be enough because he has little time left to save until his retirement years. The percentage of retirement savings must be higher when one starts later in life
• Estate planning is equated with death and taxes – two certainties in this world according to Benjamin Franklin.
• Estate planning is the preparation of tasks that serve to manage an individual's asset base in the event of their incapacitation or death. It involves planning for how an individual’s assets will be preserved, managed, and distributed after death. It also takes into account the management of an individual’s properties and financial obligations in the event that they become incapacitated.
• An estate is the collective sum of an individual's net worth, including all property, possessions and other assets.
• T or F

  Estate planning is more than taxes and death. It is also about control.

  F - more than death
• Will – is a legal document which tells how a person wants to distribute his estate upon his death. It must be written in a language or dialect that is known to him
• Testator – is the person creating the will
• Heirs – are the individuals who are set to be recipients of the wealth
• Executor – is the person named in the will who is assigned to implement the provisions
• Base – This section consists of low-risk investments such as government bonds, money market funds, and time deposits with low-yield but stable returns. These assets should form the bulk of the investment portfolio, ideally at 60%
• Useful Tips on How to Build Retirement Fund

  Start saving today

  Automate saving

  Create more sources of income

  Save more when you earn more

  Save up for emergencies
• Home insurance functions in the same way as car insurance does but for the home instead. Owning a home is part of the Filipino dream, and real estate is the preferable investment (over paper assets) in this country. With the importance of real property in this country, it should be a given to protect one’s home at all costs; however, not many consider getting home insurance, especially with the annual premiums that reach the high five-digit mark.
• Fire and home insurance policies are sometimes used interchangeably since the coverage they provide are almost the same. The main thing to note is that whether it is home or fire insurance, always read the policy, page to page.
• Health insurance is a type of insurance coverage that pays for medical, surgical, and sometimes dental expenses incurred by the insured.