By: Rich Juan, Poor Juan
We used to have several Variable Life Insurance policies from different life insurance companies. For years, we have been paying premiums of Php 20,000 per year, Php 65,000 per year and a couple of more. One day, a huge financial crisis hit our family and we missed paying most of our insurance plans. Of course, like all insurance policies, if you stop paying after 2 years it will lapse -- which was what happened to us since we couldn't afford to pay for our annual premiums at the time, together with the so-called "investment" built-in.
As an insurance adviser, I was very disappointed with what happened. I asked myself, "How could I let this happen to me? What will my clients say if I die ahead of them and I didn't have life insurance?"
Like any other normal human being, I also get disoriented when a financial crisis hits. Income stops, bills start piling up, debts start growing, and our savings, it slowly vanished. Unfortunately, we were not prepared for this much. It was a huge financial setback (back story in another blog). That is why I called this incident in our life "The Crisis".
One day, I saw this Facebook post from a friend...
Then it hit me! So what, if we have experienced this financial crisis? We are still alive, we can do this! It's time for Plan B.
Then it hit me! So what, if we have experienced this financial crisis? We are still alive, we can do this! It's time for Plan B.
We started researching other options on how we could rebuild our finances and how to regain our insurance plans.
A friend once told me, "Why don't you look into traditional insurance plans. They are less expensive than variable life policies. Since you're objective is to get protection for your family start something that you can afford with higher insurance coverage."
Hesitantly, we took the advice.
As it turned out, traditional life insurance products (whole life) are a lot cheaper than variable life policies. I used to pay Php 20,000 annual premium for a Php 600,000 life insurance coverage. With a Traditional Life Insurance policy at the age of 42, I can get a Php 19,120 annual premium for a life insurance coverage of Php 1,000,000. We got the plan from Paramount Life. This was huge! We were on to something.
That's for life insurance. But how about for my retirement?
The great thing with Paramount Life was that they had this program called FUSION PROGRAM, (They have it still.) It's a partnership that they have with FirstMetro Asset Management Inc. (FAMI) -- a mutual fund company.
How does the FUSION program work?
When you avail of life insurance through Paramount Life, you can invest in mutual funds via FAMI with NO ENTRY FEE. You can choose to start your investment immediately, or you may choose to invest at a later time.
The idea is similar to the concept of "Buy Term, Invest the Difference" (BTID), but instead of buying term insurance we have chosen to buy a whole life plan [called Prime Life] and since I don't have enough budget for the investment yet, I have decided to invest on a later time.
What's the lesson here?
We should always remember, that the Lord placed us in this situation because He knows that we could handle it if we believe in Him and His graces. We must put to heart that though we may not completely see the end of the dark tunnel we're passing through, He will also give us the solution to get through our challenges.
In rebuilding our finances, tackle one problem at a time. We get to learn from our past mistakes and look for the right solution. Don't be afraid to seek advice from a more experienced person. Once you have the solution, stand up and move forward.
As it turned out, traditional life insurance products (whole life) are a lot cheaper than variable life policies. I used to pay Php 20,000 annual premium for a Php 600,000 life insurance coverage. With a Traditional Life Insurance policy at the age of 42, I can get a Php 19,120 annual premium for a life insurance coverage of Php 1,000,000. We got the plan from Paramount Life. This was huge! We were on to something.
That's for life insurance. But how about for my retirement?
The great thing with Paramount Life was that they had this program called FUSION PROGRAM, (They have it still.) It's a partnership that they have with FirstMetro Asset Management Inc. (FAMI) -- a mutual fund company.
How does the FUSION program work?
The idea is similar to the concept of "Buy Term, Invest the Difference" (BTID), but instead of buying term insurance we have chosen to buy a whole life plan [called Prime Life] and since I don't have enough budget for the investment yet, I have decided to invest on a later time.
What's the lesson here?
We should always remember, that the Lord placed us in this situation because He knows that we could handle it if we believe in Him and His graces. We must put to heart that though we may not completely see the end of the dark tunnel we're passing through, He will also give us the solution to get through our challenges.
In rebuilding our finances, tackle one problem at a time. We get to learn from our past mistakes and look for the right solution. Don't be afraid to seek advice from a more experienced person. Once you have the solution, stand up and move forward.
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