Monday, November 8, 2010

Financial IQ: Insurance for employees?

Financial IQ Philippines Quick Hit(s):

Term life insurance fits this perfectly (which resembles car insurance).


Ensuring the welfare of contractual employees - Due to the labor laws of the Philippines, it is unfortunate that many entrepreneurs just hire contractual workers and employees, but still I sincerely want to give my employees better benefits. Does Insular Life offer any life insurance product that I can use to protect the lives of my contractual employees during the half-year that they’re working for me? Is there such a policy? What are the costs and how much are the benefits for employees? What about accident insurance? I think your columns should forcefully advocate reforms in our labor laws so they’re better for investors, the Philippine economy and all workers. More power.


Benjamin Sy Ong, 43 years old, businessman, Makati City


Answer


Thank you, Mr. Ong, for being deeply concerned about your workers’ welfare. Employer-purchased insurance benefits are usually group life and/or health insurance contracts of which Insular Life has a thorough portfolio to choose from, and we can even offer HMO plans through our subsidiary, Insular Health Care. 


As a general rule, coverage is for one year and renewable thereafter. There have been some instances in the past, however, when business owners have requested that their contract or project-based workers also be included even if their services might be for less than a year. In such cases, we extend coverage for the duration of such workers’ stay, even if for a fraction of a year. Premiums are charged accordingly. However, such exceptional considerations are first referred to our actuarial department for proper evaluation and costing because short-term contractual personnel will have an impact on the overall risk assessment of the entire organization. It may be possible to cover them depending on the results of the said evaluation. 


As for the actual cost and benefit levels, these can only be determined after knowing your specific requirements, business conditions, age and health profiles of your company’s workforce. This is best handled if you will allow one of our account executives to meet with you in order to secure the needed information for a quotation. 


Finally, on your query regarding accident insurance, there are some types of accident insurance products designed to take on short-term risks, and we likewise have this. Accident insurance is quite inexpensive because it is limited only to accidental causes. At the same time, certain avocations or occupations are excluded. Once again, the best way to determine if this will suit your purposes would be to sit down with you on this matter. Assuming, however, that your contractual workers are eligible, why not consider gifting them with a one-year accident insurance coverage if it will only cost a couple of hundred pesos or less?  



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