I do not personally own a car. The car I have been driving for the past two years is company-owned, so all of its incurred expenses like maintenance, registration and insurance is paid by the company. Aside from the maintenance and registration, I do not have an idea how much the comprehensive insurance actually costs. Not until today.
My brother, on the other hand, personally owns a car and its comprehensive insurance renewal is due this week. I asked a friend for a quotation for his car insurance. How much it costs? Php14,985 for a car with a mere Php400,000 value! Honestly, I was surprised.
Why?
Because of two things that I find really ironic.
1. Car insurance costs higher than life insurance.
The insurance of his car which is valued only at Php400,000 costs Php14,985 per year. On the other hand, if my brother chooses to get a life insurance now at age 38 for a Php1M coverage, it will only cost him Php5,080 per year.
I find it ironic because a person, with all his/her talents, time and resources, is definitely of higher value than a second hand car, and yet its insurance costs less.
2. Many would rather insure their car than their lives
When I became a financial advisor late last year and started talking to friends about insurance, I was told that they were used to getting non-life insurance only. They would insure their cars and houses, but not themselves. This is something I find hard to understand, until now. A car and a house do not have dependents. It is important to insure your properties, but it is definitely more important to insure your life, right?
Imagine this. You're driving your insured car (while you are not insured), and then gets into an accident (knock on wood please), your car is totally wrecked and you find yourself in heaven. Then back on earth, your car gets replaced by insurance and your dependents are left with nothing because you have no insurance and zero savings. The worse part, your kids are still very young and your wife is unemployed.
Yes, they can sell the car, if it already fully-paid from the bank. But remember that a car is not an asset because of its depreciated value. How long can it sustain your family?
You may say that you are a careful driver. Yes, we all are careful drivers, but we all know that there are accidents that involve the most careful drivers because they are hit by drunk or reckless ones. Even a person who is sound asleep inside his home can be hit by a stray bullet. Death is unpredictable.
My message is very simple. If you have people depending on you, get a life insurance. The purpose of insurance is this: If God calls you home, your family won't grow hungry.
Decided to get a life insurance TODAY? Email me at jssalandanan@gmail.com.
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