What's the ideal percentage of your income you should allocate to insurance?

[swit_squiggle]

a 1 million insurance would only cost around 4k. now, if you will die within that year the company, pay you 1 million in return of your 4k so that you will be given a nice burial and your family and children can still go to school and eat and continue on living, thanking their love one wherever he/she may be that despite he/she died, he/she think of them even up to the last minute. if you think that paying that 4k for a year is a burden you are not forced to buy, same as when you are selling to someone who wanted a gift for her little child. you wouldn't expect the buyer to buy a doll house since his/her budget is only 200 pesos. the chance of hitting a dreaded disease has no formula. if you think that you are prone to have one in the future because you have a bloodline of stroke, heart attack and so forth then i guess you consider taking advantage of the company's offer while you are still insurable. Its only a matter of how you value your life and the life who depends on you in the event of something happens. anyway, nobody in this world get out alive, in the end you will still be welcoming death the only question is when?

[sardonyx]

^ based on your formula: 
insurance coverage =  monthly expense x 12/3.75%

e.g.:  Php 50,000 monthly expense (which is not really considered a big monthly expense for a family)

insurance coverage =  Php 600,000/3.75%
 = Php16,000,000

IMO, too big.  And you don't really need this amount if you have big savings. 
                                                 

[blooming]

^that's premium pala sis.  malaki nga. kaya be careful when buying insurance. do your homework before you commit. 

sis, di kaya the recommended annual premium would be 10% of MONTHLY gross pay? 

currently, we are paying this kasi.

[simplymj]

I believe insurance should be based on your capacity to pay.  Kasi lagi natin isip need, eh di pa naman talaga kailangan kasi kung kailangan mo na mahal na or denied ka na. 

Savings should be 10% of your income ( at least) then in insurance you divert part of your savings. So ako 5% savings 5% insurance.

Mas bata mas mura, mas healthy mas mura, kaya kumuha na ako baka dumating ang panahon di na pwede and I have to shoulder expenses (medical) my family (burial).

Sa akin lang yun

[swit_squiggle]

  thats not my formula sissy, its from the company. actually, binibigay yan ng company pra may basis lang ng kanilang coverage. anyway depende pa rin naman yan sa budget ng tao. dahil hindi rin iyan ipipilit sa costumer pro yan lang ang sinasabing adequate coverage. because after all dyan rin ekey key in ang gastos sa libing at mga naiwang utang ng namatay. at kung may mga naiwang property for estate planning na din. kung shareholder ka pa ng isang companya kailangang malaki talaga ang coverage mo because to the company, it'll be a liability pag namatay ka, coz, dyan papasok ang problema sa kakasawsaw ng mga kapamilya ng namatay. if you have savings at namatay ka, subject po iyan for 20%+ tax ng government kaya mababawasan din po iyan  kung sakali along with other properties ng namatay. inuulit ko po. hindi iyan, ipipilit kung hindi kaya ng bulsa. dapat lang ay mapaghandaan mo.

[simplymj]

^i understand

[sardonyx]

sis, di kaya the recommended annual premium would be 10% of MONTHLY gross pay? 

currently, we are paying this kasi.

sis, the recommended annual premium is 10% of ANNUAL gross pay (it's more accurate to base on annual income because this already includes bonuses, etc.)   masyadong malaki.  IMO, reasonable enough na yung 10% of MONTHLY gross pay as your total annual premiums (lesser pa nga if you're based in pinas kasi malaki ang tax).    

[17arci]

^ unintentionally, I use almost 10% of my annual gross pay for my insurance.

[snowyice]

as far as I could remember one of the high ranking officer of insurance company said the premium should not be more than 25% of your annual income. true or not I don't know. 

[blooming]

^ I think it is too much. Sabi lang nya kasi he is in that business and he wants sales to be high. 

[swit_squiggle]

kung kumikita ka siguro ng milyon kahit sobra pa sa 25%. ang problema e kung ang kita ay nasa 10-20k lang tapos may pamilya ka pang pinapakain may anak na hehe. sobra talaga ang 25% na ipon. hahaha.

[snowyice]

^  well yun ang sabi niya.  Eh ang mahal naman kasi ng insurance dito sa pinas sa totoo lang compared sa ibang bansa kaya can't afford natin and ang mahal ng bilihin dito.  In short, mahirap talaga ang buhay dito sa pinas   

Actually, naisip ko na din yan hindi talaga kaya kahit pa Milyon ang sweldo.

[sardonyx]

^25% is too big, whatever your salary is since it's not an amount but a percentage.  nagsasayang ka lang ng pera

[swit_squiggle]

ewan ko lang kung pagsasayang ang tawag ko. I read an article that Bill Gates insured himself for a whole life protection of 1 billion dollars because thats the maximum insurance he can get. wise  in business na sya at ang dami dami nya pang pera, bakit pa sya nagpainsured if he thinks na sayang? come to think of it.

[sardonyx]

^ that's only less than 2% of his net worth

[snowyice]

^^well, sa ibang bansa kasi insurance is part na ng life nila parang SSS na nakadeduct automatic sa sahod mo and maganda kasi talaga ang coverage.  Come to think of 911...hindi yun free lahat yun may bayad and ang sumasagot nun insurance. 

[sardonyx]

ewan ko lang kung pagsasayang ang tawag ko. I read an article that Bill Gates insured himself for a whole life protection of 1 billion dollars because thats the maximum insurance he can get. wise  in business na sya at ang dami dami nya pang pera, bakit pa sya nagpainsured if he thinks na sayang? come to think of it.

can you give us the link of this article?  because i don't believe bill gates needs any insurance.  he's got all the money in the world! 

[swit_squiggle]

just read it as a comment from a US citizen somewhere in the internet. I dont know where he get the idea. eeeeeergh.. too lazy to google that.hehe

[blooming]

ewan ko lang kung pagsasayang ang tawag ko. I read an article that Bill Gates insured himself for a whole life protection of 1 billion dollars because thats the maximum insurance he can get. wise  in business na sya at ang dami dami nya pang pera, bakit pa sya nagpainsured if he thinks na sayang? come to think of it.

sis, you have to differentiate the premium and the insured amount. 

The 25% na binanggit ni sis snowyice is the PREMIUM for the insured amount.  Meaning If you are earning P1M every year, you are spending P250k (25% of your earnings) for your insurance each year.  And that insurance has an equivalent amount insured, kung baga, kung may mangyayari sa iyo, hindi P250k ang makukuha mo, yung insured amount.

In the case of bill gates, ang INSURED AMT nya is $1B, and hindi ko alam ang premium na binabayaran nya for that (maybe around $5M/yr lang). 

[swit_squiggle]

sobra naman ang 250k for 1M insurance. kasi insurance per se and if its 1M sa term pa lang e 4k+ lang ang magagastos. yung 250k siguro na sinasabi mo is kung whole life ang kukunin na merong cash values at kung ano ano pang kasama. kumpleto rekados todong todo sa rider.