Monday, June 13, 2022

Filipinos Families at Risk as Breadwinners Continue to be Uninsured

According to Swiss research firm Swiss Re Institute, 75 percent of families in developing countries like the Philippines are vulnerable to both emotional devastation and loss of income when a family breadwinner or income‐earner passes away. This is identified as the mortality protection gap.

It’s typical for a healthy breadwinner with a steady income stream to think of himself as a “superman” who will always be around to provide for his family. However, the possibility of serious illness, disability, or even premature death constantly looms over this “superman” idea—and ignoring these threats will not make them go away.

Without a Plan B in the form of proper financial planning and a risk management plan, households are left vulnerable to financial ruin.

How a Plan B protects the family from emotional and financial distress

“A lot of Filipino breadwinners, especially those in the middle class, know that if anything unpleasant happens to them, their families will be severely affected. How will their family pay for housing? Utility expenses? How will their children continue their schooling? How will they pay for their daily needs? Unfortunately, many do not face this reality or prepare for the worst. Doing so underestimates the potential financial impact on their families,” said Renato Vergel De Dios, President, and CEO of BDO Life.

Vergel De Dios pointed out that there are four key factors that threaten a family’s financial security, based on the findings of a United Nations study: unemployment or underemployment; sickness and disability; death of a spouse or the separation of a couple; and old age and death. Any one or more of these factors could happen to any person. It is only a matter of time. He pointed out how the coronavirus pandemic proved how financially vulnerable Filipino families are.

“In the past two years, we’ve all lost a relative or a friend to COVID-19. One day, they’re okay. A few days later, we hear that they were rushed to the emergency room. We next learn that they’ve been hooked up to a ventilator. A few days later, they’re gone. This pandemic has served as a wake-up call to the fact that we need to be financially prepared for such contingencies,” Vergel De Dios explained.

To protect families from financial vulnerability, Vergel De Dios advised that aside from saving money to fund emergencies and future plans, it’s most important to have a Plan B aka life insurance.

“Life insurance is the ultimate Plan B. When the breadwinner passes away, it provides funds to family members and buys them time—from a few months to a few years—to readjust their lives. It’s hard enough for family members who are grieving over the death of a parent or a spouse. It is heartless, to say the least, to impose on them the financial responsibility to pay for the next round of bills. They deserve to be protected from all that pain and suffering. And life insurance is the only financial instrument that can alleviate that,” said Vergel De Dios.

Life insurance is a dependent Plan B for Filipino families

In his financial literacy podcast, The 80 percent, licensed financial adviser Fitz Villafuerte gave an example of how life insurance can protect and preserve a family’s financial security.

“When my client’s father died, the family did not suffer much financially. The father was insured, so he left behind enough money so that the family had the income to live on as they adjusted to their new situation. The father even left behind money for the youngest child’s education,” said Villafuerte.

Vergel De Dios was a guest in Villafuerte’s podcast episode titled, “On National Insecurity and Life Insurance.” Here, he said that because the life insurance industry has thrived for over a century in the Philippines, breadwinners are assured of a dependable and trustworthy source of financial protection for their loved ones. Being without it is equivalent to thrusting one’s family to journey across the turbulent sea of life with only a life jacket on.

“We all assume that we will always stay healthy, that we will always be around to bring home the required family income month after month. But life makes no guarantees. A high-paying job, a successful business, and reasonably good health—these are no assurances that our family’s financial security is assured, without a Plan B. Just ask the family members of individuals with those same qualities yet who lost their lives during the pandemic,” added Vergel De Dios.

Filipinos are known for placing their loved ones first among their priorities. Yet for some reason, many procrastinate and defer their decision to acquire the very financial instrument that, in the direst situation, can help preserve the lifestyle that they have accustomed their family to enjoy. Life insurance is the only financial solution that makes a grieving family’s emotional distress more bearable by shielding them from day-to-day financial worries.  

Amid all the risks and uncertainties Filipino families face today, BDO Life provides easy and reliable access to a Plan B with its wide range of life insurance products and extensive network of Financial Advisors stationed in BDO branches nationwide. 

BDO Life is a wholly-owned subsidiary of BDO Unibank, the largest banking network in the country. For any inquiries, speak to a BDO Life Financial Advisor at the BDO branch nearest you. 

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