The Safety Net for Everyone: How Health Insurance Can Provide Comfort and Care in Retirement
Planning the division of your income apart from your job is essential to secure a comfortable future and retirement. To come up with this plan, you have to evaluate your current financial situation and future needs to create a solid strategy.
Unfortunately, preparing for retirement almost always takes a backseat to taking care of the family. The Philippine Institute for Development Studies debunked the Filipino belief that saving up to 2.1 years of personal income is sufficient for retirement because, considering the average lifespan of 72 years and the retirement age of 60, this preparation falls short of about 10 years. [1]
You may turn to your savings account and rely on your retirement pay. However, these types of accounts generate a lower interest rate than the current inflation rate of 3.18%, while the sufficiency of the latter differs on a case-to-case basis.
Under the Retirement Pay Law, or RA 7641, retiring employees are entitled to a retirement pay equivalent to at least one-half month's salary for every year of service, provided they have worked for the company for at least five years in the company.
As mentioned, sufficiency is dictated by your personal financial goals. You can also explore alternatives like insurance with investment plans that have comprehensive health insurance coverages but also double up as retirement insurance.
If you want more tips, read on to learn more ways to help you secure a comfortable retirement.
Understanding health insurance for retirement
Like any other life goal, time is of the essence in saving up for retirement. Bangko Sentral ng Pilipinas believes that saving up for retirement earlier facilitates better decision-making for your career, family, and loved ones because it assures financial security in your twilight years.
If you start investing now, why should you choose to invest in health insurance for retirement?
The COVID-19 pandemic in 2020 dramatically reshaped attitudes towards health insurance in the Philippines as reflected by the growing share of the GDP contribution of the insurance industry. It unearthed the importance of planning for risks like death, accidents, and healthcare expenses amidst a public health emergency.
Having an emergency fund set aside during periods of lockdowns and community quarantines spelled the difference between financial stability and vulnerability, offering a safety net when traditional sources of income are scarce. A 2020 Pru Life UK study shows that young Filipino adults are more cognizant of the impact of COVID-19 as a public health crisis, and are therefore taking steps not just to protect themselves but also of financial burden. [2]
With awareness of the importance of health protection at an all-time high, let’s course through the core benefits of having a health insurance plan and how health benefits correlate with a worry-free retirement.
Maintaining your health throughout your career allows you to set aside funds for your retirement. Additionally, health insurance plans cover prevalent ails during your golden years. Plans offered by Pru Life UK, one of the leading life insurers in the country, include health insurance focused on covering a wide range of critical illnesses, providing financial protection for income lost during confinement, and pre- and post-hospitalization expense benefits.
Currently, the Filipino worker enjoys government benefits through the Social Security System (SSS), the Government Service Insurance System (GSIS), the Home Development Mutual Fund (Pag-IBIG), and the Philippine Health Insurance Corporation (PhilHealth). These measures are implemented through salary deductions specified in the Labor Code, If not formally employed, you may apply as a voluntary member to avail of the benefits as well.
On top of these services, our government is working to support the needs of the aging population through increasing social pension allocation for indigent Senior Citizens and drafting reforms to the private pension system. Despite this, retirement worries still plague the Filipino population. A survey in a study shows that 90% of Filipinos are worried about “being poor and in need of money” during retirement.
These retirement worries may arise from the possible insufficiency of statutory benefits. After all, this is a question of financial burden and personal goals which vary from person to person. With improvements in our pension system still underway, you can start saving up for your retirement by availing health insurance plans. In this manner, you can maintain your health throughout your career and be financially secure in your golden years.
What inclusions should your health insurance have?
Let’s zoom in on health insurance. What are its primary inclusions, and how has it changed through the years? At its core, health insurance pays for medical and surgical expenses and preventative care costs in return for monthly premiums. Today, a recognized drawback in healthcare access is the lack of health insurance. The lack of health insurance coverage may cause individuals to put off or skip medical visits, raising the chances of worsening health issues and leading to considerably higher costs.
Fortunately, insurers now provide enhanced health insurance plans tailored to meet the evolving needs of their consumers. Let us look into some health insurance plans offered by Pru Life UK, the top life insurer in the Philippines, according to a report of the Insurance Commission (IC) in the 3rd Quarter of 2023. [3]
With PRUHealth FamLove, you can:
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Share your coverage with up to 3 eligible family members with just one plan.
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It is as it only requires you to answer a simple health questionnaire without the medical examination requirement;
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Eligible members can include same-sex or common-law partners depending on the selected product package.
In other words, health insurance does not only protect you but your family, too. Not only that, health insurance covers not just surgical expenses but also daily cash benefits during confinement.
With PRUWellness, you receive a daily cash benefit for each day of hospital confinement up to 365 days of continuous confinement due to accident or illness, among other benefits, including dread disease benefits and possible ICU confinement.
Likewise, it can be tailor-fitted to critical illness-specific plans, such as PRUHealth Prime, that can help ease the financial burden of having cancer and other critical illness conditions. Stated simply, health insurance benefits cater to a wide range of individuals and critical illnesses.
During the pandemic, the IC issued several landmark rules that eased regulations, such as authorizing sales through digital tools and allowing continued operations of insurers, especially those providing health products and services. These made insurance products more accessible to the public to protect them from heightened health risks.
Today is the best day to prepare for a rainy day. Indeed, your everyday decisions shape the future lived by the people you love. So, when unfortunate things happen, your early preparation guarantees urgent care while ensuring your family’s financial protection.
Never settle for less in investing for your future. Saving up for your retirement cuts through your personal goals as well as your goals for your family. The end goal should not be limited to getting by, but rather living life comfortably in your golden years. It is the sweetest gift you can give to someone who has worked hard consistently through the years.
Questions? Don’t hesitate to contact Pru Life UK today, and/or visit our FAQ page.
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