Breadwinners tend to think they’ll always be around to provide for their family, especially if they’re healthy or with a stable source of income or both. But getting sick, disabled, or dying prematurely are real possibilities that won’t go away even when you ignore them. Breadwinners (income earners) aren’t superhuman and without a Plan B (proper financial planning and a risk management plan), households can face financial ruin when the breadwinner suddenly can’t provide anymore.

Plan B helps the household cope with emotional and financial stress

75% of developing countries, like the Philippines, says Swiss research firm Swiss Re Institute, are vulnerable to the emotional pain and loss of income when a family breadwinner dies. The term for this is “mortality protection gap”.

“How will their family pay for housing? Utility expenses” How will their children continue schooling/ How will they pay for their daily needs? Unfortunately, many do not face this reality or prepare for the worst,” said Renato Vergel De Dios, President and CEO of BDO Life. “Doing so underestimates the potential financial impact on their families.:”

He pointed out four factors that threaten a family’s financial security:

  • Unemployment or Underemployment
  • Sickness and Disability
  • Death of a Spouse or the Separation of a Couple
  • Old Age and Death
    Any of these, which are based on the findings of a UN study, can happen to anyone. The pandemic is a wake up call to how vulnerable Filipino families are.

“In the past two years, we’ve lost a relative or a friend to COVID-19. One day, they’re okay. A few days later, we hear they were rushed to the emergency room. Then we learn they’ve been hooked up to a ventilator. A few days later, they’re gone. … we need to be prepared for such contingencies,” Vergel De Dios said.

Aside from having saved money for emergencies and future plans, he said, it’s important to have a Plan B, like life insurance.

“When the breadwinner dies, 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 spouse. It’s heartless 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,” Vergel De Dios said.

“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,” said Fitz Villafuerte in his financial literacy podcast, The 80 Percent. “The father even left behind money for the youngest child’s education.”

While Filipinos prioritize the welfare of their loved ones, they somehow defer in getting life insurance, which can preserve the lifestyle their family is used to. Life insurance makes emotional grief more bearable by shielding them from daily financial worries.

As Filipino families face risks and uncertainties, BDO Life easy and reliable access to a Plan B. It offers a wide range of insurance products and an extensive network of Financial Advisors in BDO branches nationwide. BDO Life is owned entirely by BDO Unibank, the biggest banking network in the Philippines. You can talk to a BDO Life Financial Advisor at any BDO branch nearest you.

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