Do you know who needs life insurance the most? Yes, it's you who have to endure homesickness and loneliness working abroad to give your family a better future.
If you still can't see the point in paying premiums, consider the real-life story of a fellow OFW. Remember the news about Joanna Demafelis, a domestic helper who was found dead in a freezer in Kuwait last February 2018?
Because Demafelis was an agency-hired OFW, she's covered by the government's Compulsory OFW Insurance Program[1]. Her family received death benefits under the OFW life insurance program even if the date of death was unknown.
While not everyone will have the same fate, it pays to be financially prepared for when something unthinkable happens. Here are six strong reasons OFWs must get life insurance.
1. Your Family Needs Protection When There's Sudden Loss of Income
Most OFW families—extended families included—rely solely on OFW remittances for their household income. If you're an OFW who's the sole breadwinner, imagine how much your loved ones would suffer when you can't earn income anymore due to serious illness, disability, or death.
Having an OFW life insurance policy protects your family from the financial impact of sudden income loss. Your beneficiaries will receive a lump-sum benefit to help them cope when you're gone.
Even if you have savings and investments, the money you've worked hard for many years will deplete fast if you don't have life insurance. Any asset you leave behind will be subject to a 6% estate tax. In the Philippines, life insurance for OFW typically covers estate taxes.
2. Working Abroad Makes You Prone to Job Hazards and Unhealthy Lifestyle
OFWs, especially those who work at oil refineries, laboratories, construction sites, and sea vessels are exposed to many occupational risks.
Even OFWs at less risky job sites who work long hours, skip meals and barely have days-off tend to overlook their own health because they prioritize earning a higher income to send to their families back home.
Over time, all these will contribute to health conditions like diabetes and heart disease. Sudden hospitalization can easily cripple an OFW family's finances. Life insurance for OFW acts like a safety net, easing a family's financial burden when an OFW family member gets sick.
Read more: OFW Health Insurance: 3 Ways to Protect Yourself from Financial Risks
3. Only Agency-Hired Workers Have OFW Life Insurance Coverage Under the Law
The Migrant Workers and Overseas Filipinos Act (Republic Act 10022) requires recruitment agencies to get compulsory OFW life insurance for workers they deploy abroad. The insurance coverage, which comes at no cost for agency-hired OFWs, provides benefits up to USD 15,000 (PHP 795,825).
The OFW Compulsory Insurance is mandatory for agency-hired workers only. Life insurance for OFW direct hires is optional, according to the Insurance Commission. If you're hired directly by a foreign employer, you aren't covered by the compulsory life insurance for OFWs. But that doesn't mean you don't need it as much as agency-hired OFWs do.
You have two options for OFW life insurance. You can enroll as an OWWA member (and pay a USD 25 membership fee), so you or your family can receive disability, dismemberment, or death benefits[2] from the government agency when needed.
Insurance companies such as Sun Life, AXA Philippines, and Philam Life offer life insurance products specifically for OFWs. Nowadays, it's convenient for OFWs to buy life insurance online. No need to wait for the next homecoming in the Philippines to get insured.
4. You Can Grow Your Money While Getting Insured
You won't be an OFW forever. Time will come when you'll have to come back home and reunite with your family. Getting insured helps you prepare not only for your homecoming but also your retirement.
Hesitant to get life insurance because premium payments feel like throwing money away? Consider getting a variable unit-linked insurance (VUL) plan—it allows you to get insured while building your savings and investments, too.
A Philam Life survey found that 82% of OFWs don't have enough savings to return home to the Philippines for good. The OFWs surveyed said they need an average of PHP 3 million to live comfortably when they come back home.
With all your financial obligations, it's hard to save that much money in a short time. Getting a life insurance product with an investment component is one of the ways to build funds you need for your return to the Philippines.
Read more: How OFWs Can Increase Their Savings and Come Back Home for Good
Final Thoughts
All your hard-earned income and sacrifices as an overseas worker will be wiped out in a snap if you don't insure yourself. An OFW life insurance will protect your loved ones against financial losses should a misfortune happen to you.
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