Gen Z’s Guide on How to Choose the Right Life Insurance Policy

You may think that life insurance plans are only for your parents and grandparents. Well, think again!

Life insurance is an important financial tool for all generations, including Gen Z. With so many insurance options available, selecting a life insurance in the Philippines that suits your needs as a Gen Z requires careful thought and planning. That’s what we’re here to do.

This article will guide you through the key considerations and how to choose the right life insurance policy for Gen Z.

Why You Shouldn’t Just Choose Any Insurance

Purchasing life insurance is similar to buying a house or a car. It’s a major investment and can make a big difference in your life. This is why it’s important to do ample research and carefully choose your insurance policy.

Financial security is the main reason you need life insurance. However, while their purpose is the same, not all insurance policies are created equal. Some may have high premiums, insufficient coverage, or restrictions that don’t align with your needs.

Making a hasty or uninformed decision could leave you underinsured or paying more than necessary. It’s vital to assess your unique circumstances to find the policy that fits you best.

Things to Consider When Choosing a Life Insurance Policy for Gen Z

A life insurance policy has many moving parts. Which ones should you focus on to find the right one for you?

Health and Lifestyle

Life insurance serves as a safeguard for your assets and beneficiaries in case something bad happens to you. Thus, your health and lifestyle are major factors in life insurance, particularly on your eligibility and the cost. If you have pre-existing medical conditions or have high-risk hobbies, you may be charged a higher premium.

Thus, it’s vital to choose a policy that reflects your health and lifestyle choices.

Financial Goals

Life insurance should align with your long-term financial goals, whether it’s securing your family’s future, paying off debts, or building wealth. Consider how the policy fits into your broader financial plan.

Coverage

The coverage the insurance offers is a critical factor. A policy should provide enough protection to cover your family’s or beneficiary’s needs in case of an untimely death, including debts, living expenses, and potential future costs like education.

Type of Policy

Although life insurance is only one type of insurance, under its umbrella are different types of life insurance policies. Term life, whole life, and universal life insurance each have their pros and cons. You may find that you need to balance costs with benefits. 

Policy Length

Consider how long you need coverage. Some life insurance offers shorter coverage length while others protect you throughout your life.

Benefits and Riders

You should also consider the life insurance benefits and riders. Riders are added benefits like critical illness coverage, accidental death benefits, and so on. Assess the features of your policy and the best riders to add to enhance your coverage.

Premiums

Balancing the cost of premiums with the best benefits and coverage is important for Gen Z. Make sure the premiums fit within your budget without sacrificing necessary coverage.

How to Choose the Right Life Insurance Policy for Gen Z

Follow these steps to find the right type of life insurance for your needs as a Gen Z:

Look at Your Financial Situation

The first step in choosing a life insurance policy is evaluating your current financial situation. This includes understanding your income, monthly expenses, savings, and any outstanding debts.

For Gen Z, who may still be in the early stages of their careers, this assessment is crucial to ensure you’re not overextending yourself by paying premiums that you can’t afford in the long run.

Understanding your financial picture ensures that the policy you choose fits within your current budget, helping you avoid financial strain while maintaining adequate coverage.

Determine the Right Amount of Coverage

Once you have a good understanding of your financial situation, the next step is to determine how much coverage you need. The coverage amount should be enough to replace your income, cover outstanding debts, and support your loved ones financially in the event of your death.

Choosing the right coverage amount ensures that your policy will meet your beneficiaries' needs, preventing them from facing financial difficulties should anything happen to you.

Compare Different Options

Once you know what type of policy you need and how much coverage is required, it’s time to compare different options. You’ll want to examine not just the premium rates, but also the features, benefits, and any riders (additional coverage options) that come with each policy.

Comparing rates, features, and benefits ensures that you get the most value for your money. More importantly, this step ensures that you find the life insurance policy that best fits your personal needs and financial goals. It helps you avoid overpaying for unnecessary coverage or choosing a policy that doesn’t offer enough flexibility for future life changes.

Vet the Insurance Provider

Life insurance is a long-term contract, so an important tip for Gen Z in selecting a life insurance policy is to choose the service provider carefully.

Verify the insurance provider’s financial standing to ensure that they will still be around and capable of paying out your benefits when the time comes. You want to make sure that the insurance company is also licensed by the Insurance Commission of the Philippines.

Research their customer service, too. Do they have financial advisors that will help you choose an insurance policy and how to choose a beneficiary for your life insurance? Is it easy to file a claim with the insurance provider? How long does it take for them to process claims and disbursements?

Read the Fine Print

When evaluating policies, it’s important to read the fine print and understand what’s covered and what’s not, as well as the riders you can add to tailor your policy.

Understanding the benefits and riders ensures that you’re maximizing the potential of your policy. Adding the right riders can provide a safety net for unforeseen circumstances while avoiding unnecessary ones can help you save on premiums.

Overall, the fine print is where you learn how to navigate the insurance policy, ensuring that you have the right coverage and can get your benefits when you need them.

Build Your Dream Life with InLife

Every generation has its unique needs and financial goals. For Gen Z, a life insurance policy can serve as a foundation for financial freedom. Your life insurance now will be your companion and safeguard throughout life, which is why the choice shouldn’t be taken lightly.

Take your time researching and comparing the different life insurance policies available. Don’t hesitate to seek guidance from one of InLife’s financial advisors so you can be confident in your insurance.