It's an excellent choice if you want to secure your family's financial future while choosing the right insurance can be a daunting task, especially when it comes to life and health insurance. With a myriad of options available, it's natural to feel overwhelmed. We're here to simplify the process and help you understand the benefits and differences between these two types of insurance, empowering you to make informed decisions that secure your future. First, let’s start with health insurance.
Health insurance: A lifestyle choice
Health insurance is no longer just a necessity; it's a lifestyle choice. It's like choosing your favorite streaming service; you want the one that offers the most options. While you may already have a Health Maintenance Organization (HMO) plan, getting health insurance may provide you with more comprehensive coverage than what HMOs typically offer, such as life and accident insurance as well as coverage for critical illnesses.
So, what's the difference between HMO plans and more flexible and comprehensive health insurance options?
- Health and Hospitalization Plans. AXA Philippines provides comprehensive health and hospitalization plans that cover a wide spectrum of healthcare expenses. Whether it's hospitalization fees, doctor's fees, diagnostic tests, or prescription medications, these plans have you covered, ensuring your healthcare needs are taken care of. With Global Health Access, for example, you get the flexibility to choose your healthcare providers and hospitals, anywhere in the world, giving you the freedom to seek care where you're most comfortable.. While Health Care Access provides comprehensive and affordable health and hospitalization plan option locally.
- Critical Illness Plans. Critical illness impacts not only your finances but also your loved ones. Our critical illness plans pay you a lump sum in the event of a diagnosis of any covered critical illness like cancer, strokeand heart attack, ensuring you the financial security you need when facing a challenging health situation. This benefit lump sum you can use to replace lost income, cover treatment expenses or adapt your living environment to your new needs.
HMO plans can be restrictive in terms of choosing healthcare providers and hospitals, AXA Philippines' health and hospitalization plans offer a more comprehensive and flexible coverage, while its critical illness plans provides protection and benefit lump sum, providing a financial safety net when you face a life-altering diagnosis. This flexibility empowers you to make choices that align with your lifestyle, health, and well-being.
Understanding VUL: For financial protection and wealth building
Variable Unit-Linked insurance, commonly known as VUL, is a popular insurance product due to its dual nature. It offers both life insurance coverage and an investment component. Here's how it works:
- Life insurance. VUL provides a safety net for your loved ones, ensuring they're financially protected if something unexpected happens to you.
- Investment opportunity. What sets VUL apart is that it allows you to invest a portion of your premium in local and global funds. This means your money has the potential to grow over time, providing you with an opportunity to build wealth alongside your life insurance coverage. Just getting a VUL alone won’t maximize VUL’s potential to build wealth, though. To do this, you need to use the product’s top up feature.
It's an excellent choice if you want to secure your family's financial future while exploring the potential of various investment vehicles such as the stock market, bonds, and money market funds which you may choose from depending on your investment profile.
Types of VUL policies
In general, insurance companies will offer various VUL policies, each tailored to different financial goals and life stages. Here's a more detailed look at two of these policies:
- Wealth accumulation plans: building a financial foundation
Imagine you're in the early stages of your career or business. You're working hard to secure your financial future and provide for your family. Wealth Accumulation Plans are like the financial building blocks you need. These policies are designed for individuals who want to grow their assets and secure their financial future. - Retirement planning: preparing for your golden years
Now, picture yourself a bit older, perhaps in your 40s or 50s. Retirement is on the horizon, and you want to ensure that you have a comfortable nest egg to enjoy your golden years. Retirement Planning VUL policies are designed just for that. They focus on building a retirement fund that can provide financial security during your post-working years.
These VUL policies offer you the flexibility to meet your specific financial objectives, providing both protection and investment opportunities. Depending on your life stage and goals, you can choose the one that suits you best. It’s important to note that in insurance and investment plans, only part of your premium goes towards investments, with the rest going to your insurance coverage. To maximize your investment benefits, it's advised to regularly top-up your plan’s funds.
Paying for VULs: Single, limited, and regular pay options
VULs also differ based on how you pay your premiums. First, there’s regular pay where you pay premiums until the maturity of the policy or a specified age in the policy.
Meanwhile, single pay is where you make a lump sum payment of the cost of insurance. This is ideal if you already have funds set aside to buy an insurance product.
Finally, limited pay is where you pay premiums throughout a predetermined period that is shorter than the policy’s term. For example, you may have a 20-year policy in which you only need to pay premiums during the first 10 years.
The payment options available may differ from insurer to insurer. It’s important to discuss these options with your financial advisor so you can choose one that fits your needs.
Understanding the charges: Navigating the financial aspects of VULs
Now, let's delve into the financial intricacies that may seem less thrilling but are crucial to your financial well-being. VUL policies, like any financial product, come with a range of associated charges. These include:
- Cost of Insurance. This is the amount you pay to secure the life insurance aspect of your VUL policy. It ensures that your loved ones are protected in case of an unfortunate event. The cost of insurance is paid regularly and increases as you get older.
- Premium Charges and Administrative Fees. These are the fees associated with the administration and management of your VUL policy. They cover the costs of keeping your policy active and ensuring it runs smoothly. It may also include the costs of paperwork, record-keeping, and maintaining your policy's administrative infrastructure.
- Asset Management Charges. These charges are linked to the investment component of your VUL policy. They cover the professional management of the funds you've invested, ensuring they have the potential to grow over time.
- Top-Up Fees. As mentioned earlier, topping up your VUL can help increase its potential to grow your wealth. If you decide to contribute additional funds beyond your regular premium, you may encounter top-up fees. These fees may be associated with managing the increased investment.
- Surrender Charges. As the owner of the policy, it’s natural to prefer to keep your policy for the long-term. However, there may be instances when you might decide to terminate your policy prematurely. In this case, surrender charges may apply. They are designed to cover the costs associated with early termination.
When it comes to life and health insurance, it's about more than just protection; it's about personalization. AXA Philippines ensures that your health plan fits your unique needs, giving you the freedom to live life on your terms. We offer comprehensive coverage through a wide range of life and health insurance plans and VUL policies designed for various financial goals and life stages. With a commitment to being your partner for life, we adapt to your strategies as your circumstances change and goals evolve, ensuring it walks with you on your financial journey.
Game plan your way to financial preparedness by availing of any of AXA’s health insurance plans or VUL policies. For more information, contact an AXA financial advisor.
