How Much Life Insurance Do You Need Based on Your Family Role?

The Brutal Truth: Your “PHP 1M Policy” Might Leave Your Family Bankrupt 🤯

Let’s cut to the chase: most Filipinos buy life insurance based on “kung ano ang kaya ng budget”—not what their family truly needs. Result? When tragedy strikes, the payout barely covers the lamay, let alone the future.

Take Kuya Alden, a UV driver 🚐 sa Taytay: He bought a PHP 500k policy, thinking it was enough. When he passed, his wife discovered his debts (PHP 300k) + funeral costs (PHP 200k) left her with PHP 0 for their kids’ schooling.

Ganun ba talaga ang buhay? Dapat hindi no? So let’s fix this.

The Formula: “Multiply Your Salary” Doesn’t Work Here

Forget generic advice like “10x your income”. Your role in the family dictates your needs. Here’s how to calculate it:

1. Breadwinners: The Solo Sustento

• Debts: Credit cards, car loans, personal loans.
• Future Costs: Kids’ tuition (e.g., PHP 250k/year for college) × years left.
• Daily Expenses: Multiply monthly bills (food, rent, utilities) by 60 months (5 years).

Example:

• Debts: PHP 500k
• 2 Kids’ College: PHP 1.5M × 2 = PHP 3M
• Monthly Expenses: PHP 20k × 60 = PHP 1.2M
  Total: PHP 4.7M

But wait—if you have a spouse who works, adjust accordingly. Use my Debt Management Guide to prioritize payments.

2. OFWs: The Modern-Day Bayani

Your padala or remittance is clearly your family’s lifeline. Coverage should replace 10 years of remittances (minimum).

Why? It gives them time to adjust—whether starting a business or finding work.

Example:

• Monthly Padala: PHP 30k
• 10 Years: PHP 30k × 120 months = PHP 3.6M
• Add debts and future goals (e.g., pabaon for a child’s wedding).

Pro Tip: Include a critical illness rider. Medical repatriation costs alone can hit PHP 1M.

Dive deeper: OFW Guide to Life Insurance.

3. Single Parents: The Walang Backup Plan

You’re the cook, driver, and ATM. Your coverage must fund:

• Childcare costs until your youngest turns 23.
• A guardian fund (if relatives will care for your kids).

Example:

• Childcare: PHP 15k/month × 12 years = PHP 2.16M
• Guardian Fund: PHP 500k (for “thank you” support)
  Total: PHP 2.66M

4. Empty Nesters: The Retirado na, Pero May Utang Pa

Your kids are grown, but your mortgage isn’t. Cover:

• Remaining home loan balance.
• Final expenses (funeral, medical bills) to avoid burdening your children.

Example:

• Mortgage: PHP 1.5M
• Funeral + Hospital Bills: PHP 500k
  Total: PHP 2M

The Pinoy Trap: “But I Can’t Afford It!”

Here’s a shocker: A PHP 3M term policy for a healthy 30-year-old can cost less than PHP 1,500/month—just the price of one dine out at a regular restaurant. So it gets me to wonder, who do many of us waste money on “investment schemes” that are clearly scams?

Myth Busted: “Mas mahal ang insurance kaysa sa lote.” Wrong. Term life is cheaper than your shopee haul. Check Term vs. Whole Life Insurance to pick the right fit.

3 Action Steps to Lock Your Number

1. List EVERYTHING: Debts, tuition, 5 years of bills. Use my Free Calculator Template.
2. Subtract Assets: SSS death benefit, existing insurance, lote value.
3. Talk to a Pro: Licensed Financial Advisors can help you achieve your goals according to your set timeline.

If you are interested and wants to plan and secure your financial future now, let me know and I'll be happy to help. Just click the link below to connect with me. 😉

Final Word: Di na Uso ang “Bahala Na”

Just realize that Life insurance isn’t a luxury—it’s actually your family’s airbag.

Without it, a single accident could erase decades of pagpapakapagod. Don’t be like Aling Nena, who sold her sari-sari store to pay her husband’s hospital bills.

Kaya mo ba silang iwan nang walang laban? I didn’t think so.

📌 One Last Thing:
The information in this article is for general financial education only and is not a financial advice. Insurance needs vary wildly—what’s perfect for your kapitbahay might not work for you. Policies, costs, and regulations change, and investment-linked policies (like VUL) carry risks.

You need a personalized plan that's perfect for you and your family. Don't believe everything you read on the internet and always conduct due diligence. To support my posts, my research and sources are documented on this page. Good luck and always remember, God is blessing you! 💌

~Always at your service, Lex R.