Insurance, as defined by Merriam-Webster: Is a coverage whereby one party undertakes to guarantee another against loss by a specified hazard/peril. In other words, this is a form of contract that will support us financially just in case an unfortunate event happens, which is in truth, a very inevitable occurrence.

A search in the Web will give us plenty of information of what Life Insurance Policy to choose. However, some are so technical that it gives us more questions than answers. In this article, we will define the Types of Life Insurance in a very simple context.

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What Is Insurance?

Insurance is a contract of reimbursement. It reimburses for losses from specified hazards/perils. The insurer is the company who promises to reimburse. The insured/assured or the beneficiary is the one who receives the policy payment.

What Are the Different Types of Insurance?

Insurance covers both businesses and individuals. We will just focus on the insurance types that are catered for individuals.

Life Insurance

We all have our end game; this is the cycle of life that we cannot escape no matter what we do. Yes, we can delay it... but the fact remains that we will leave this world. Given this reality, might as well prepare for it. In simple terms, Life insurance is design to cover and ease the financial burden experienced by your family in your absence.

Choose the insurance policy that at least gives a coverage of 10 times your annual income.

Health Insurance

As we journey to life, there will come a time that we will be visiting a doctor. Be it a regular check-up or seeking cure for an illness. Fortunately, the government is doing its best in providing a better and affordable health care. Employers are also providing this benefit via the HMOs (Health Maintenance Organization).
Having this kind of insurance will help you cover the cost of hospitalization, doctor's consultation, and medicine.

Disability Insurance

This policy pays a certain percentage (the best polices offer 50% to 60% income replacement) of an employee's salary/wage if he/she is unable to work because of illness or an accident. This is the most overlooked type of insurance because many of us doubt that we will become disabled.

Education Insurance

College education is without a doubt an expensive one. Though there are many avenues to avail college education like scholarships and part time jobs, these options are not suited for everyone. Having a College plan will definitely help.

If you are from the Philippines, then you might heard of the College Assurance Plan (CAP) fiasco where around 800,000 policy holders were not able to received their payments. Discussing why it happened is an article for another day, but to give you a clue... the factors were both governmental and economical.

When Should I Get an Insurance?

The earlier you start the better because the payment premium is dependent on your age. As you add up a year, the harder it is to get an insurance because it will be more expensive. However, paying a much higher premium because you started a little late is still worth it if you think about the upsides of having one.

Where Should I Get an Insurance?

A search in Google or Yahoo will give you a list of the top insurance companies depending on what country you are situated. For Filipinos, visit thewiseguyph page for the top 10 insurance companies from the Philippines (the list comprises both local and foreign companies).

Disclaimer: I am not affiliated in any way to the thewiseguyph site owner. The owner is an insurance agent on which his company is part of the list. The content of the article is easy to understand and is appropriate as a part/reference for this article primer "Life Insurance 101".

How to Know What Insurance Type Is Appropriate for Me?

Doing an online research is fine to help you prepare for the basics. However, getting an insurance is a life decision that must be discussed to a registered insurance agent. Meaning, you will need to book an appointment and to have a heart-to-heart talk about it. Be wary though of some who is just "in" for profit/commission and not for your welfare.


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We live in a much better time that we can at least prepare financially for the uncertainties of tomorrow. Take advantage of it.

If you are getting an insurance policy for your car, your home, and even your phone, then it is more logical and obvious to get an insurance for yourself.




- The Affluent Perspective by Ælfræd "Elf Counsel"