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Thursday, June 30, 2022

Filipinos families at risk as breadwinners continue to be uninsured

Research conducted by Swiss Re Institute indicated that 75 percent of families in developing countries like the Philippines are vulnerable to emotional devastation and loss of income when a family breadwinner or income-owner passes away. This is known 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, a wholly-owned subsidiary of BDO Unibank.

Vergel De Dios 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,” he 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.

Vergel De Dios added 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,” concluded Vergel De Dios.


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