It has been a great challenge for the Financial Industry (specifically the insurance industry) to increase the percentage of Filipino breadwinners having an economic protection against any risk. Majority of our fellowmen have a misinterpretation about risk, they only associate risk with dying; that is why fear comes in.Majority haven’t seen the effect of economic risk which primarily involve financial struggles and burden. It has been found out that Risk management is the defensive strategy a breadwinner can do against undesirable things that is very possible to happen like loss of job, disability, hospitalization, and even death; and to corporate risk like death of keyman, disability, disagreement, and retirement.
Man’s inherent nature is to seek security against life’s perils:
- Risk of Loss of Life – not “if” but when
- Risk of Financial Ruin – loss of assets, income, or both
- Risk of adverse health – it would combines both above
“You cannot eliminate risk. You can only protect yourself and your loved ones against the consequence of risk.”
To deeply understand who are the people needs risk management, when to use it, what are the needs it satisfy and who to seek consultation.
- Who are the people – it is understood that all of us should need to have a risk management however we need to specifically identify to narrow down our targeted market. All of us will go through these stages: Single, Married, Parenting, Empty Nester, Retired. These 5 stages can help us identify where we can use risk management to their daily lives.
- Single – mostly at this stage, people are empowered their passion. They talk about big dreams like building their own home, pursuing their own business and owning their first car. They need to cope up with their active lifestyle. They enjoy living the present, but spend less than 20% of their time thinking about their future. The risk involve are: loans, loss of income, cost of hospitalization and income protection if they have a living dependents like parents.
- Married- at this stage, people are thinking now of bigger responsibilities like having their family big. Their priorities have changed. They are now more conscious about money management; like how much they need to save and spend to cope up with their responsibilities. The risk involve are: hospitalization for husband and wife, wealth accumulation, loans, and disability.
- Parenting – this stage involves a lot of bigger responsibilities since there is more mouth to feed. Breadwinners are now thinking of kid’s future education, and cost of healthcare. The risk involve: loss of income and asset, wealth accumulation, education cost, and everyone’s health care.
- Empty Nester – This stage have lesser financial parenting responsibility stress since all their kid/s begin to leave home. Their focus have shift to conservative wealth management. The risk involve: liquidity, more hospitalization care, and estate planning.
- Retired – This stage should be a financial stress-free, not just they get senior’s discount but they should need to enjoy their hard-earned money. It is now money working for them. The risk involve: estate planning, medicine cost, and hospitalization.
- When to use it
- The best time to do Risk management should have been yesterday, but since yesterday has past then today is better.
- What are the needs it satisfy
- Replacement of income in the absence of breadwinner. Income will continue to sustain the family’s need through risk management.
|Threats to income||Basic services of Insurance||Guaranteed Benefits|
|Death||Family protection||Death Benefit|
|Disability||Guaranteed savings||Cash Values|
|Old age||Retirement Income||Maturity Benefit|
- A guaranteed maintenance of Lifestyle. The family lives the same condition as provided by the breadwinner.
- Mortgage payments or liquidity. When confronted with debts, Insurance proceeds will carry out the full payment of unpaid obligations. Your debt should not over live you.
- Clean up fund. Final expenses resulting from death (Emergency & hospitalization expense, Burial and memorial expenses).
If you are interested in CERTA’s personal risk management strategy, contact us today !