OFW insurance is a type of insurance that is specifically designed for Overseas Filipino Workers. It is important to note that OFWs are usually not covered by the social safety net of their host country. This means that they are not entitled to any form of unemployment or medical benefits.
In this article, we will cover why you need to get insurance!
What is Insurance?
Insurance is a form of risk management, primarily used to hedge against the risk of potential losses.
Insurance provides financial protection against many unforeseen events. These include medical expenses, natural disasters, theft and vandalism. It can also protect against the loss of income due to unemployment or disability. Insurance policies vary in how they are structured, with different types providing different levels of coverage.
Risks can be divided into “primary” and “secondary” risks, based on whether the insurance company has a stake in their outcome:
- Primary risks are those for which the insurer is liable. For example, property damage that results from fire or natural disaster. These events are widely considered catastrophic because of their potential to destroy significant amounts of wealth and change people ‘s lives forever. Many types of insurance policies cover primary risks, including fire and windstorm policies, homeowners and vehicle insurance policies, flood insurance and earthquake coverage.
- Secondary risks are those that have nothing to do with the insurer; they are merely financial risks to be managed by the insurer. For example, if a person purchases a policy that pays off if he or she becomes unemployed because of sickness or injury but has no interest in becoming employed again, the policy would be considered secondary risk management.
The Need for Overseas Filipino Workers (OFWs) to Have Insurance
Overseas Filipino Workers (OFWs) are exposed to a lot of risks, especially when they are in a foreign country. It is for this reason that OFWs need to have insurance.
These workers are usually not covered by the Social Security System and the Philippine Health Insurance Corporation because they live abroad.
The Overseas Workers Welfare Administration (OWWA) has been providing them with benefits but these benefits cannot be compared to the ones offered by private insurance companies. This was the standard life insurance policy that covers the needs of OFWs. But it has been widely criticized for not covering all their needs, especially when they had illnesses. The policies offered by private companies have more comprehensive benefits and are more affordable.
The Commission on Audit found that OWWA failed to provide jobs and livelihood programs to cover the growing number of OFWs, and did not have enough money to cover its obligations in 2014, therefore causing a backlog of pension benefits owed to OFWs. In response, OWWA started a five-year livelihood program to cover the growing number of OFWs. It also started a new retirement program for OFWs in 2016 with a monthly pension equivalent to one third of their average income in the last two years.
5 Reasons Why Overseas Filipino Workers Needs Insurance
1. Protects them from accidents and issues with their health
Health insurance benefits are one of the most important benefits that a company can offer to its employees. The company should provide them with the best possible health care plan that will protect them from any accidents or issues with their health. Overseas Filipinos should also be given the same health care benefits that they would be given if they were in the Philippines.
2. If a Parent is in the Philippines and One Child is Overseas, Life Insurance is Necessary to Help Support the Child When the Parent Passes Away or if they Become Unable to Work Due to an Illness or Accident
In this day and age, it’s not uncommon for parents to have one child in the Philippines and another child living overseas. If one of them passes away without life insurance, the child left behind will be left without any financial support.
This can be avoided by purchasing life insurance that covers both children. This way, if something happens to one of them, the other will still be able to live comfortably.
3. Provides a Financial Safety Net in Case They Lose Their Jobs or Become Ill
The cost of the insurance is relatively lower than other types of life insurance because it provides a financial safety net in case they lose their job or become ill.
4. The Benefits Are Tax-Free, and You Can Use It for Other Purposes as Well
The benefits are tax-free, and you can use it for other purposes as well.One of the major benefits of this type of insurance is that it provides a financial safety net in case they lose their job or become ill.
5. Provides Dignity to Unauthorized Workers
One of the major benefits of this type of insurance is that it provides a financial safety net in case they lose their job or become ill.The disadvantages are that the coverage can be very expensive and often not worth the cost to some people.
Conclusion: What Filipinos Can Do to Protect Themselves & Their Loved Ones From Dangerous Situations
The Overseas Filipino Worker (OFW) Policy is a long-term insurance policy that will cover Filipinos who are going to be working abroad. This coverage is available for those who are going to be overseas for more than one year.
The OFW Policy has been in the market for many years now and it has helped many Filipinos who have been victims of natural disasters, accidents, or other unforeseen events. The policy has a lifetime value of Php150,000 and it is renewable. The individual coverage for the OFW Policy costs about Php10,000, which covers the cost of medical expenses and repatriation during one year. The premium for the individual coverage is affordable thus making it a worthwhile investment for those who are going to be overseas.
Filipinos should purchase the OFW Policy in order to protect themselves from unforeseen events while they’re abroad. If you don’t want this type of insurance, you can avail from any of the Insurance Agency and you can choose what type of program is for you.
For more OFW contents, visit OFW Investing. Thank you for reading!