Insuring your future

When Filipinos talk about insurance chances are the first word associated with it would be “expensive”. After that the general response is that it’s a luxury or not a priority. Ultimately people simply assume they can’t afford it. This is all understandable since many  Filipinos don’t have a lot of disposable income and whatever they have usually goes into making car payments, for some a mortgage and the proverbial scholarship fund or savings for tuition fees. We all assume we know enough to know we can’t afford insurance but I recently had a few discoveries while taping a program for AGENDA about insurance concerns from no less than the chairperson of Standard Insurance Patty Echauz Chilip who joined the family business in 2009 and has since then seen more than her fair share of calamities that have struck Filipinos and rendered them homeless, penniless and broken.

Aside from being a third generation insurance executive, what makes Patty special and credible is the fact that she is a “survivor” of a helicopter crash that proved fatal for one friend and painful for other survivors. Patty narrated how before the crash she did not feel pressured or convinced on taking out a life insurance perhaps due to the fact that she is quite young and at the prime of her life. But a week after her near death experience, Patty immediately took out a life insurance so her young kids would have some additional financial support if anything happened to her or her husband. Half of the time, people think in terms of insurance for personal safety or gain in the future but now everybody thinks of someone else’s future such as a dependent parent, sibling or children. We tend to forget that if we are taken out of the equation, everyone depending on us will have to start from scratch or worse given that they would first have to settle burial expenses and then estate taxes and the likes. Almost always the loved ones left behind start from a deficit.

*      *      *

Another discovery for me fell under the term “Under Insured”. Many homeowners presumably have some form of fire insurance, earthquake insurance or a combination of the two. But Patty suggested that we all review our coverage and have our homes or property reassessed at least every two years to determine the actual value and an updated cost to rebuild or reconstruct our homes if calamity struck. Please take into consideration that, God Forbid, if a fire or earthquake hits and demolishes your house, you will need to have enough money to first clear all the debris from your lot and hopefully enough money to rebuild something similar or better. However, many homeowners and building owners tend to simply renew their insurance policy based on the original value indicated in the first policy. When Patty pointed this out, I realized that I have a 19-year old “townhouse-style” residence that has remained insured for the same value it cost us to finish the house in 2000. Nineteen years later, the cost to construct such a house would be two to three times more and that doesn’t include demolition and hauling in the event of a catastrophe. The other thing that many people fail to appreciate is the fact that an insurance policy on the home or building is also an insurance policy for the future of your heirs. You are insuring the substantial part of your estate unless you are Mr. Moneybags who has more cash flow than the water concessionaires have flowing water.

*      *      *

When earthquakes hit Mindanao, one of the most heartbreaking scenes was that of a couple who owned a condominium unit in Davao City that collapsed. We saw the couple re-entering the condemned building by climbing through the debris of several floors flattened forming a “stair of walls” that the couple used before entering through a window. This was the initial reason why I invited Patty to the show in order to know what condominium unit owners should know in terms of insurance. Little did I know that it is now a common practice among condominium associations (homeowners) to get insurance coverage for the entire condominium in case of fire, earthquake, or calamity. The unit owners get a better deal compared to buying individual policies and because of the large policy involved, a number of associations simply collect payments through monthly dues or assessments. My hope is that the unit owners at the Ecoland Condominiums in Davao City had an association prudent enough to take out a group coverage so they can rebuild or buy units elsewhere. If you’re one of the many retirees who’ve decided to downsize and live the “Lock & Go” condo lifestyle, please make sure your association takes out an insurance for your complex.

*      *      *

If you travel as much as I do, whether locally or international, chances are you are wise and prudent enough to take out a travel insurance especially going to the US where an unscheduled medical procedure or emergency would be financially catastrophic. But traveler Beware! Your travel insurance will most likely cover an unknown and unexpected emergency such as a broken bone, fracture, laceration in an accident and appendectomy etc. But if you happen to have a known, pre-existing medical condition such as diabetes, heart failure or cardiovascular disease and it decides to erupt or manifest itself on the road, Patty warned me that there is a high probability that the usual travel insurance won’t cover it or reimburse you. Whatever the case maybe, you are well advised by Patty to thoroughly inquire and maybe even ask for written details regarding coverage particularly for your own pre-existing medical conditions.

*      *      *

Email: [email protected]