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Life Assurance - BPI Pamana


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JohnSurrey

I put some money in a BPI Pamana Savings account a while ago to avail of their free life assurance...

It only covers me until I am 60

Anyone suggest alternative plans or places to get life assurance here?

 

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Davaoeno

I wasnt sure what the difference is between life insurance and life assurance [ what the OP is looking for ]- so I googled it :

 

The average man in the street assumes that Life Insurance and Life Assurance are names for the same form of insurance. How wrong they are! But don't hang your head in shame, many financial commentators get it wrong too! Life Insurance and Life Assurance perform different financial roles and are poles apart in cost - so it helps to surf for the correct product.

Life Insurance provides you with insurance cover for a specific period of time (known as the policy's "term"). Then, if you were to die whilst the policy is in force, the insurance company pays out a tax-free sum. If you survive to the end of the term, the policy is finished and has no residual value whatsoever. It only has a value if there is a claim - in that context it's just like your car insurance!

Life Assurance is different. It is a hybrid mix of investment and insurance. A Life Assurance policy pays out a sum equal to the higher of either a guaranteed minimum underwritten by the policy's insurance provisions or its investment valuation. The value of the investment element is then a reliant on the Insurance Company's investment performance and length of time you have been paying the premiums.

http://www.taxplanet.com/magazine/other-topics/107-miscellaneous/467-difference-between-life-insurance-and-life-assurance

 

btw I only quoted part of the article

Edited by Davaoeno
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Headshot

So, they are saying that "term insurance" is life insurance, but "whole life insurance" (which invests money) is life assurance? I have never heard it explained like that before.

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JohnSurrey
12 minutes ago, Headshot said:

So, they are saying that "term insurance" is life insurance, but "whole life insurance" (which invests money) is life assurance? I have never heard it explained like that before.

lol - neither have I - I think they are saying the same thing - basically life assurance pays out whenever - and life insurance covers a specific term...

My sloppy mistake the BPI product is Life Insurance - stops at 60.

I'm easy - Anything that will cover me for the 15 or 20 (75 or 80) years or until I die will do me.

 

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Richard K
19 minutes ago, JohnSurrey said:

lol - neither have I - I think they are saying the same thing - basically life assurance pays out whenever - and life insurance covers a specific term...

My sloppy mistake the BPI product is Life Insurance - stops at 60.

I'm easy - Anything that will cover me for the 15 or 20 (75 or 80) years or until I die will do me.

 

I am interested in this also.. my bank, PNB, offers a life insurance policy...I am too old for it tho

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I think you’ll find that life insurance policies written here are quite limited for age 60 and above. I’ve seen a policy for one million costing around ₽31000 a year at age 60. But, no premium listed for renewing at age 65. Rates are likely based upon Filipino longevity   

 

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HongKongPhooey
9 hours ago, Headshot said:

 

So, they are saying that "term insurance" is life insurance, but "whole life insurance" (which invests money) is life assurance? I have never heard it explained like that before.

 

Not really. Life assurance is both an insurance policy and investment. You agree to take up a policy with a minimum investment, paid over the first few years (let’s say 3) that “guarantees” a certain return minimum over a preset period, plus a variable component based on an interest rate or investment election in the policy. If you die before the policy balance accumulates to the guaranteed minimum, the policy pays out the minimum guaranteed plus any variable gain.  If you don’t die, you can cash out the policy after the preset period and get the guaranteed amount plus the variable component. 

For example- the policy amount is 100,000 on a 10 year policy. The investment period is three years. The interest rate paid is the Fed rate. You will pay them 100,000 in the first three years. After 10 years they guarantee a minimum 10,000 retirement bonus.  So after 10 years they will give you back your 100,000 + a guaranteed return of the 10,000 + the interest rate accumulated during those 10 years.  You cash out the policy for 110,000 + interest.  (that’s the investment part). If you die in year 5, before the accumulation period of 10 years, your beneficiaries get the 110,000 + interest upto year 5 (that’s the insurance part).

The thing they don’t tell you is that commissions and fees are deducted from the variable part and your accumulated principal which is significant, which is why every financial advisor in Asia will love to sell you these policies.

Also, if you are a US tax payer, these are not qualified insurance products for US tax purposes , which means you have to report them and they are taxed as normal income.

If you are a US tax payer, you should reconsider. Full disclosure: I hold a small one; not sure if I will regret it but wouldn’t purchase another one.

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JohnSurrey
9 hours ago, HongKongPhooey said:

Not really. Life assurance is both an insurance policy and investment. You agree to take up a policy with a minimum investment, paid over the first few years (let’s say 3) that “guarantees” a certain return minimum over a preset period, plus a variable component based on an interest rate or investment election in the policy. If you die before the policy balance accumulates to the guaranteed minimum, the policy pays out the minimum guaranteed plus any variable gain.  If you don’t die, you can cash out the policy after the preset period and get the guaranteed amount plus the variable component. 

For example- the policy amount is 100,000 on a 10 year policy. The investment period is three years. The interest rate paid is the Fed rate. You will pay them 100,000 in the first three years. After 10 years they guarantee a minimum 10,000 retirement bonus.  So after 10 years they will give you back your 100,000 + a guaranteed return of the 10,000 + the interest rate accumulated during those 10 years.  You cash out the policy for 110,000 + interest.  (that’s the investment part). If you die in year 5, before the accumulation period of 10 years, your beneficiaries get the 110,000 + interest upto year 5 (that’s the insurance part).

The thing they don’t tell you is that commissions and fees are deducted from the variable part and your accumulated principal which is significant, which is why every financial advisor in Asia will love to sell you these policies.

Also, if you are a US tax payer, these are not qualified insurance products for US tax purposes , which means you have to report them and they are taxed as normal income.

If you are a US tax payer, you should reconsider. Full disclosure: I hold a small one; not sure if I will regret it but wouldn’t purchase another one.

Fascinating stuff...

With all that knowledge you must have some good alternatives to suggest!

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A few years ago, there was a report of a large investment firm selling these sorts of investments which ended up bankrupt, or out of business.  I don’t recall the exact details, but I do recall the takes of frustration of many investors.  

The prodicts they sold were based upon an education investment.  That is, a family would buy the investment plan, starting when the child was young.  When the child reached college age, the product would "guarantee" school costs would be paid.

These investments seemed similar to the funeral plans sold as prepaid.  Pay a certain amount, be guaranteed a funeral valued at some fixed price.

All was well for many years, until college costs increased.  The companies were unable to cover the college costs, so the families were left with a bad investment and a child expecting to go to school.

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Ozepete

Life Assurance.. no way IMO

Decades ago after my old man retired from the land he got a job selling life insurance, FFS!.

I asked him 'Dad how the hell do you sell that shit'  He said it's easy, you just drive around the country looking for houses with mock brick cladding and in you go!  Like, if they are silly enough to buy that mock brick crap, they'd buy anything. He sold a lot of policies but not too many lasted very long! :D

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Davaoeno
13 minutes ago, JohnSurrey said:

No of replies so far = 7

No of alternatives suggested = 0

Advice requested - for life assurance.

 Advice requested re life insurance- 0

Advice given re life insurance- 0

Seems  pretty appropriate

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1 hour ago, JohnSurrey said:

No of replies so far = 7

No of alternatives suggested = 0

One alternative is to NOT buy any investment product such as the ones described above.  Instead, take the money that might have been spent on premiums and place it into a low risk bank certificate of deposit.  At the age of 60, premiums will almost certainly be in the tens of thousands for basic coverage.  

I have saved one year’s income for my family, rather than have it invested.

Perhaps a bit of google search for these investment products will help you decide just what you want to do.  

I’ve  been busy making Smart assed comments to others today, so hadn’t taken the time to research your question.  Which is what exactly?  How to have money for my family when I die?  

See paragraph 1 above. . 

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HongKongPhooey

Appologies, but I was addressing the life assurance vs insurance as a policy definition in Asia per the responses to the OP.

If you are looking for an alternative solution outside of insurance, nobody would have an answer to that unless they new something more than your basic post and profile. It all depends on your situation.

It’s  like a sandwich. If you asked me what the best sandwich to order in the world; it would be a beef, dipped, hot, mozz (Italian beef, diipped in gravey, hot peppers, and mozzarella cheese). That would not be good advice to a Hindu, lactos intolerant, gluten allergy, reflux disease person. 

The advice is all relative to your situation.

Alternative 9–1. Fly to Chicago, order an Italian beef and forget all this nonsense.

 

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