It’s Because you Survived!

Yuppies (Young Professionals) who are single, no dependents, and have good company health benefits will always say that I don’t need insurance.

Middle-aged adults and those who near retirement and has a lot of money will also say that I don’t need insurance.

But insurance, particularly Disability and Critical Illness Insurance, is there not because you die, but because you SURVIVED!

In one of my previous articles, The Biggest Investment Risk, I discussed the need for a wealth protection plan and that the biggest investment risk is the investor himself.

So Why do You Need Disability and Critical Illness Insurance?

Let’s make it more visual, if you have read The Ultimate Foundation of Wealth, I’ve discussed that the foundation of wealth is the ability to create profit:

And if you have followed the advice, this is how you should be managing your money:

However, life is full of uncertainties. In 2016, according to MMDA, the average vehicular accidents in Metro Manila is  303 per day. WHO statistics say that 70% of deaths are the result of either Cancer, Stroke, or Heart Attack:

When Disability or Critical Illness strikes, this is what will happen to your income and expenses:

When you have already consumed all your allowable leaves (vacation, sick, etc.), when you have already maxed-out your health card coverage, and you can no longer go to the office and work, what happens to your income is it goes down.

Your expenses, on the other hand, does not care if you can no longer work. Hospital and medical bills will not stop when you stop working. And when they intersect, this is what we call the point of Personal Economic Crisis:

At this point in our lives, we have two options:

  1. Do whatever it takes to survive. Sell all assets, liquidate investments, and worst, go into DEBT. And the saddest part is: Losing the Dignity that you once had.
  2. Give up on life and just wait for your time.

This is Where Disability and Critical Illness Insurance Comes In!

Insurance makes sure that you can continue living with Dignity and the Lifestyle that you currently have. It makes sure that you recover without thinking about finances. It gives you the peace of mind so you can take life’s risks.

How much Disability and Critical Illness Insurance Coverage Do I Need to Have?

Each person has different needs and lifestyle. It is best to have a sit down meeting with your wealth planner or financial advisor to know the right amount for you.

But to have an idea, we will discuss some rules of thumb on how much coverage you should have.

Disability Insurance Coverage

    1. Know you Monthly Expenses.
    2. How long would you like to be covered? (rule of thumb is 10 years)
    3. Do you have any dependents?
      1. If none, 10 years would suffice
      2. If you have children, how long will your youngest child be financially capable to live on his own.
      3. If your wife or parents is dependent on you, how long would you like to provide for them (e.g. until they reach 80 y.o.)
  1. Use this Formula: Monthly Expenses x 12 months x number of years
  2. Add expenses such as hospital, medical, and therapy expenses ( est. P250,000-P500,000)

So let’s do a sample computation:

Example 1: Single without any dependents

If your monthly expenses is P30,000 per month and you don’t have any dependents, you would be needing at least:

P30,000 x 12 months x 10 years = P3,600,000 Coverage

Add other expenses, you can round it up to P4,000,000 Disability Coverage.

Example 2: With Children as dependent

If your youngest child is 5y.o., and your monthly expenses is P40,000, you would be needing at least:

P40,000 x 12 months x 20 years (25y.o.-5y.o.) = P9,600,000

The assumption here is that the child will be financially capable at age 25.

Add other expenses, you can round it up to P10,000,000.

For sample computation based on your current situation, you may contact me.

Critical Illness Insurance

According to DOH, the top killer diseases in the Philippines is Cardiovascular Disease (CVD), cancers, chronic respiratory diseases, and diabetes.

A heart surgery in the Philippine Heart Center will cost from P250-P1Million++. Neurosurgery  due to stroke will also cost as much if not more.

Below is a sample cost of a chemotherapy session:

  • Taxol (Paclitaxel) – P42,000 per session
  • Granulokine (Filgrastim) – P7,000 per 300mg vial
  • Abdominal CT scan – P23,000 per procedure
  • Other expenses (room, professional fee, etc.) – P36,000 per session
  • Total – P108,000 per session

If you need 4 sessions of chemotherapy per month for the next 6 months, the total amount needs is P2.592M (P432,000/month x 6 months).

PhilHealth (click on this link to search how much Philhealth can cover) will cover around 30% of your hospital bills and your health card may cover you up to P250,000-P500,000. But will it be enough?

An of course, you want to be treated by the best and the best does not come cheap!

A Critical Illness Insurance will give you the lump sum amount based on your coverage so you can focus on getting well and keep your dignity.

One of the top Life Insurance Companies in the Philippines covers the following Critical Illness up to P5,000,000 coverage:

Based on this, one should have at least P2M-3M coverage of Disability and Critical Illness Protection.

It is best to talk with your wealth planner or financial advisor to have a personalized plan for you.

So How Much Would It Cost?

The answer is it depends!

It depends on your age and current health risk. Insurance is cheaper while you are young. Not everyone can be covered by insurance.

That’s why it is best to contact a wealth planner or financial advisor so you can know if you can qualify.

But to give you an idea, a 30y.o. Healthy Male who can set aside P3,000/month for a VUL (insurance with investment ) can get the following benefits (this is for illustration purposes only):

  • Life Insurance Coverage: P2,000,000
  • Disability Insurance Coverage: P2,000,000
  • Critical Illness Coverage: P2,000,000
  • Fund Value at Age 60 (Investment Return): P2,519,511 (withdrawable)

I will discuss VUL in future articles but as you can see it is a financial product wherein you can save, get protected, at the same time make your money grow for you.


To end, you should remember that you need Disability and Critical Illness Insurance because you have survived.

The amount of coverage you would be needing depends on your current lifestyle and personal situation. It is best to contact a wealth planner or financial advisor to know your current needs.

Not everyone can be insured. It is best to get insurance while you are young and healthy. As the saying goes:

Your Millennial Wealth Planner,

Harold Q. Gardon, CWP, CEPP

How do you find the article? Do you have any questions? Please feel free to message me if you want me to discuss a particular topic or if you are seeking financial advice.

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