Staying One Step Ahead of Disabilities That Can Put You Out of Action

Statistically-speaking, you’re more likely to be disabled – be it by an accident or an illness – than you are to die. What this means is that you’ll need disability insurance just as much as you need life insurance. The former, however, is not readily available in the country, unlike the latter. And that can spell trouble considering all the risks of being afflicted with conditions that can put you out of action.

To put things into perspective, the Philippine Statistics Authority (PSA) in 2016 found that approximately one in every two Filipinos aged 15 and older experienced moderate disability. Though the causes of these disabilities are not clear, the probability of you being disabled one way or another simply cannot be understated.

 

 

What does this data tell us?

Accidents, illnesses, or anything that can cause disability can happen to anyone, regardless of health status or age.

Even worse, some disabilities can affect the quality of your life and can even possibly stop you from being able to work. And if you’re unable to make a living, you, in turn, cannot provide for your loved ones who may be dependent on you.

Despite government institutions like the Philippine Social Security System, the Pag-IBIG Fund, and PhilHealth offering some financial support for disability cases, what you receive from them is not enough to cover you and your family for medical expenses and income replacement. Additionally, making claims can present a number of challenges, including time-consuming paperwork.

Simply put, to be as secure as possible for any unforeseen occurrences in the future, you cannot rely solely on government aid.

 

 

What do I do?  

Ask yourself, in the worst-case scenario that you’re disabled and unable to work: How long can you support your lifestyle without any income?

Add to that that the threat of COVID-19 is far from gone, putting you at risk of catching a serious virus that can put you out of action.

Enter disability insurance, a financial plan that covers a part of your monthly paycheck when you’re either sick or disabled.

As mentioned earlier, however, disability insurance plans are not available in the Philippines. That’s why getting yourself covered for disabilities is not as straightforward as, say, health and life insurance.

But this is not a cause for worry as you can always self-insure. Doing so essentially lets you fund your own disability protection plan with your own money, instead of buying a plan from an insurer.

You might be absorbing some of the risks that you normally pass to an insurer, but this option lets you enjoy a more customized, cost-efficient, and flexible coverage. And one such way you can self-insure for disabilities is via mutual funds.

A sound financial plan should cover 5 pillars: investment or rate of return, retirement planning, income planning, protection planning, tax planning, and estate planning. While mutual funds are primarily investment instruments, they’re also an essential tool in complementing some of the insurance plans you have as part of your protection planning pillar. Think of it as your savings of sorts, secured in a place where it can grow and be used in the event that you need it.

That’s not to say, you don’t need life, health, or critical illness insurance anymore. My recommended self-insuring solution is the concept that takes the place of disability insurance in this case, and mutual funds investment is the product. Having all these lines of insurance actually make your protection planning pillar whole, ensuring you get the most comprehensive protection possible.

Mutual funds can be purchased directly from an asset management company like SLAMCI (Sun Life Asset Management Co., Inc.) through a Certified Investment Solicitor. It requires a certain amount of planning so it’s best to consult a professional about how to go about this.

As with most financial plans, the earlier you start the better it is to grow your savings. You might not be thinking about it now if you feel strong and healthy, but time doesn’t stop for anyone. And by the time you might need it, it will already be too late. Moreso, if you feel you’re more at risk of disability. 

We purchase insurance plans to protect ourselves, our families, and our assets from the worst case scenarios of certain circumstances. But since there are no disability plan options here, having an alternative that in a way serves the same purpose is your best bet. Ultimately, what’s important is that you do everything you can to protect what’s arguably your most important asset – yourself.