On Dying Too Soon and Living Too Long

Posted by Fitz Villafuerte under In Focus, Personal Finance on November 8, 2012

If given the choice, would you rather die too soon, or live too long?

Well, I’m sure you’d choose the second option, unless you’re missing a few screws in your head.

Indeed, everyone wants to live a long and happy life.

However, it’s a fact that nobody really knows when they’ll die.

And if we are to believe our country’s demographics, then the most we can hope for is live past the life expectancy in the Philippines, which is 71.66 years.

Interestingly, it’s been also found that Filipino men have a life expectancy of 68.72 years; while Filipina women are at 74.74 years.

Again, if we are to believe these demographics, then husbands (who are usually the providers) will have to make sure that their wives can live comfortably for about another six years after they die.

Of course, family roles are changing and both men and women, husbands and wives – are now equally empowered to be providers.

Alongside this change are improvements in science and health, whose advances have extended our life expectancy over the years – which means we can expect to live longer and healthier as the decades come.

So what do these statistics tell about our topic for today?

Simply put, it’s all about being financially prepared for whatever may happen to us.

As I’ve said, nobody really knows when they’ll die, because that 71.66 years is just an average figure – which means some will die before they reach that age (knock on wood), while some will fortunately live way past beyond that number.

life insurance investment On Dying Too Soon and Living Too Long

Dying Too Soon

How do you make sure that the financial needs of your loved ones will be taken cared of when you suddenly pass away?

The easiest solution is to have life insurance.

Building wealth takes time, while getting a life insurance policy only takes minutes.

When you do the second option, you immediately protect the financial future of your loved ones if any untoward incident happens to you.

Living Too Long

On the other end of the spectrum, how do you make sure that you’ll have enough money to spend if you manage to live beyond expectations.

In this case, the easiest solution is to have investments.

You can’t tell yourself, “I’ll just save enough money so I can live comfortably until I’m 70 years old,” because what if you live until 80 years old? Are you going to spend the last 10 years of your life in poverty?

By having investments, you create for yourself a surplus of money and income that will sustain you, and even your next generation.

Insurance and Investments

The income protection that a life insurance brings, plus the passive income that investments generate ensure that our financial future is well-accounted for.

Is there a product that can act as both insurance and investment?

Yes! It’s called Variable Universal Life Insurance, or simply VUL.

This is a type of permanent life insurance that pays the death benefit to your beneficiary when you “die too soon”, but also generates income and builds on cash value like an investment which you will receive if you “live too long”.

A win-win situation, right?

But before you go and call your insurance agent to inquire about their VUL products. Let me tell you about a product which I’ve discovered lately…

old age health care On Dying Too Soon and Living Too Long

An investment, life insurance, and healthcare – rolled into one.

Kaiser International Health Group Inc. is a Securities and Exchange Commission registered, and Philippine Department of Health approved company which provides health care to Filipinos, both here and abroad.

But unlike your traditional HMO (health maintenance organization), they provide the only known long-term health care service in the country.

One of their products, the Kaiser Premium Health Builder, is to my knowledge, the only VUL-similar product that goes beyond providing life insurance and investment because it gives you the added benefit of having long-term healthcare.

The subtitle of this section says it all – it’s a life insurance product, that also builds on its cash value like an investment, which will generate passive income for you in the future.

But beyond the typical benefits of your traditional VUL – it’s also a health savings account that offers health care benefits similar to an HMO.

Learning more about Kaiser Premium Health Builder

If you’re interested to learn more about this product. You can check out the company’s official website here, specially this page.

But if you want someone whom you can talk to personally and explain to you in greater detail about this product, then you can contact Dr. Jaime and Jocelyn Lorenzo at 09155522471 or email them at jaime.lorenzo@img-wealthacademy.com

And while you’re at it… why not also attend the FREE Money Seminars at the IMG Wealth Academy because this product is exclusively discussed there.

Actually, to tell you honestly, everything that I’ve said above – I learned from attending their seminars. You can read about my IMG Wealth Academy experience here.

I guess that’s it for now.

I hope you were able to appreciate my explanation on the importance of having both life insurance and investments. And if you want to receive more personal finance discussions like this, then please subscribe to Ready To Be Rich.

Reference:
Demographics of the Philippines. Wikipedia, the free Encyclopedia. 27 October 2012.

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Photo credits: PHBascon and barsvd

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24 Responses to “On Dying Too Soon and Living Too Long”


  1. java says:

    Mr.Fitz:

    1. Please discuss topics about EDUPLANS.
    – want to know which of them can act as an investment, insurance at the same time.

    2. I have acquire some eduplans (Ayala Life) and already finished paying just waiting for its maturity. They say I can loan some amount, will it be advisable if i did loan and invest it in UITFs.

    3. They also said if I can’t wait for its maturity I can take back the capital plus some interest it acquired. If I take it and invest it in mutual funds will it be more profitable?

    I’m thinking since it will still take some time to mature (10yrs) might as well invest it in another instrument which will provide higher yields. Besides I heard that some people had a hard time claiming their policy when in it matured and I hope the CAP eduplan tragedy does not happen again.

    May you also please discuss topics on Bonds? not James Bond…
    Because I watched the movies Girl with dragon tattoo, and formula 51, which converted cash to Bonds and vice versa, they also say its more safe and valuable than cash money… the villains demanded bonds instead of money ????

    Thank you and hope for you support.
    God bless.

    Rdgs;
    java

  2. Jovell says:

    Thank you for the info Sir Fitz. I’ve been looking for a good health insurance aside from Philhealth. I’ve been offered AXA life insurance with the bundle of an investment fund..something to that effect. Kaiser looks promising so I’ll be checking them out. But do you have any insights about AXA?

  3. Elleica says:

    Hi Fitz!

    I’ve also attended Free Money Seminars by IMG. They are really good and they provide valuable insights. Of course, when I attended, I was encouraged to join. I was a bit skeptical though about their networking part but I believe in the products they offered.

    What about you? Did you get to the part where they told you how to earn money through IMG?

    Thanks!

  4. Elleica says:

    To Jovell,

    I’ve been offered AXA insurances as well. And from the discussion given by Fitz, it seems that they are a VUL. But I am also interested in the type Kaiser offers.

  5. BB says:

    I was also invited to join IMG. The initial pitch was very enticing. They have valid points when it comes to the importance of financial planning. But I got turned off because I realized that it’s really networking. Also, I find the figures published in the Kaiser schedule of premiums TOO GOOD TO BE TRUE. I only found this out after I paid the P3900 membership+ID fee. I am not very confident that the company would be able to deliver the figures on the Kaiser premium booklet.

    Bottom line, I do not believe in Kaiser. Better get yourself a plan from an established insurance company.

  6. Thanks for sharing this info. Another good instrument to be considered.

  7. I always prefer insurance and investment to be separate and not rolled into one. The reason?
    1. Insurance + Investment are expensive. They charges alot of money for they will be the one who will do the investing for you. You will actually paying their services for doing active investing.This products also tends to have higher premium so be very very aware.

    2. Whatever your paying, they will not 100% invest, atleast they will only tell you that certain percentages will be invested that you will get benefit from. Talo ka rito kasi kung investment tlaga ang pakay mo, i rather to have my money fully investment, rather than none or small portion.

    3. You can buy term insurance for cheaper price. I have a term insurance that i pay 10 times cheaper than insurance with investment. For sure you could get cheaper term insurance for the same coverage at a cheaper price.

    4. You can invest in funds and have the ability to choose where do you want to put your money, what’s the percentage you want to allocate and have to freedom to control your risk. Sa insurance + investment, WLA KANG CHOICE.

  8. puwing_ako says:

    why worry about what to eat, what to wear? tomorrow has its own troubles. the important thing is live in the moment.

  9. Raymund says:

    Is the company also regulated by the Insurance Commission or by SEC only? For insurance products, I think it is better to get one to a company under the eyes of Insurance Commission. The IC has been great in its job to secure the interest of the public because no insurance company has ever closed down in Philippine history.

  10. Fitz says:

    @java
    I’ll look into educational plans and will write about that topic soon. Thanks for the suggestion.

    As for your question, if the interest on the loan is lower than the conservative potential income of the UITF you’re planning to invest in, then that might be a good idea. If not, then don’t loan from it.

    Moreover, what was your objective when you acquired the eduplan? Is it for the education of your child or as an investment? If it’s for your child’s education, then just let it mature there. If not, then you can take it out and invest it in other instruments which can earn more.

    There’s no way of telling if mutual funds will be more profitable. It depends on which MF you put it in, and the length of your investment horizon.

    The assumption here is that the company from where you bought your eduplan is reliable, efficient and trustworthy as per your belief. Do your due diligence, be objective in your study, and decide on whatever your instincts tell you.

    Lastly, bonds, in simple terms, are “promissory notes of payment”. They are issued by companies, and more commonly, governments.

    If you invest in a Philippine government bond, for example, the “paper” will tell you that the Philippine government owes you money and will pay you with interest after a certain number of years.

    Government bonds are considered low-to-moderate risk investments because when the time comes that you need to redeem them, the government can just “print money” to pay you – unlike companies which should have funds to pay you.

    Many movies convert cash to bonds because it’s less bulky to keep. One paper bond can be worth $100,000. Imagine safekeeping (or transporting) $10M worth of money, versus just 100 pieces of “bond paper” (pun intended).

    I’ll surely write an article about this too, but I hope my short explanation is satisfactory for now.

    @Jovell
    Unfortunately, I don’t have any insights about AXA, but I’ll try to look into it and likewise ask some friends about it.

    @Elleica
    From the couple of months that I’ve been with IMG, I’ve observed that there are three stages of being a member there.

    First, you join because you want to increase your financial literacy. This is where I am now, I am attending their seminars and want to complete all their 31 modules.

    Second, since you will learn a lot about investments through their seminars, you would then become an investor and take advantage of your free access to their partner companies and their investment products.

    And third, after experiencing the benefits of financial education, and seeing your money grow through your investments, you would then want to share it to your family and friends. And this is where the networking business will come in.

    The important thing to remember here is that you are NOT REQUIRED to do the networking business. I’ve met people who joined IMG simply because they wanted to attend the seminars; there are also others who just want to gain access to the investments they offer.

    Those who do the networking business aspect of IMG, are simply those who saw that there is an opportunity to earn from the knowledge that they are getting – and decided that they would like to pursue it. If it’s not your cup of tea, then no one should force you to do it.

    Personally, I’m too busy to do the networking part, and just enjoying learning from the seminars (for now) – and as you can see from above, the lessons there can make for good articles here in my blog. But of course, I have to credit them for it because that’s where I learned it.

    On the investing part, I’m just glad that Philequity and DMCI are their partner – that will save me a lot of time and effort contacting them individually… as both are in my future investment plans. With regards to Kaiser, I already bought a plan (just the minimum) – as part of my investment portfolio diversification.

    @BB
    Thanks for the insight. Indeed, some of the people there are “too eager” to sell the networking side of the business. I’ve already told them that it’s a major turn off because I believe IMG should be more than that.

    As I’ve said to Ellieca above, doing the networking part is completely optional and one can just join for the financial education – which is what I’m just doing there.

    Moreover, indeed, it’s always a valid concern if a company would be able to deliver their promises because after all, it’s still a business that can either grow big, or go under.

    Kodak, Banco Filipino, Lehman Brothers Holdings, Prudential Life Plans Inc. – these are all big companies (both local and global) which went bankrupt. Ten years ago, no one could have predicted that they would close down.

    That’s why my advise is to always diversify to spread your risk. I actually already have a health insurance and a life insurance – but still decided to get Kaiser. Why? Because as I’ve said to Ellieca above, I believe that Kaiser can be a good addition to my portfolio.

    @Jonathan Modejar
    That’s right! Insurance plans with investment features are usually more expensive than basic term insurance plans. And there are investments that can give higher potential yields.

    If your investment fund is limited, I would actually suggest that you simply get a term insurance plan for your protection. And just invest in better yielding “standalone” investment products.

    However, as your investment fund grows – so is the need to diversify your portfolio. And VULs and other products like Kaiser Premium Wealth Builder, now become good options as “secondary-tier” investments.

    Thanks for sharing those facts. I’ll be sure to write a separate post regarding the difference between term insurance and VUL’s.

    @Raymund
    To my knowledge, Kaiser is regulated just by the SEC. Actually, Kaiser is not a life insurance company, it’s an HMO. And IMG is a distributor of Kaiser, not its owner. HMOs are not under the supervision of the Insurance Commission. FYI.

    In any case, IMG is also partnered with United Coconut Planters Life Assurance Corporation (Cocolife), which is a company regulated by the Insurance Commission – so you can get your insurance from them instead of Kaiser.

    I showcased Kaiser in this post because I found it interesting that it’s the only long-term health insurance in the country.

    Lastly, thanks for the input. It’s great advise for people who are looking into buying life insurance to look into the companies being regulated by the IC.

  11. I'm G! says:

    Term Insurance is the best choice to protect the “Die Too Soon” scenario.

    But if you want to protect the “Live Too Long”…Kaiser will be the best answer. Why? With Kaiser you are building your Long-term Healthfund. At 60, we are retired and our cash flow might be tight, and at 60 – sickness will start to strike.

    With your Kaiser Healthfund, you’ll have the peace of mind when this comes. You don’t need to immediately withdraw from your Mutual Funds or sell your properties, what if you got sick while it’s Economic Crisis? And you don’t have the healthfund? You will be forced to withdraw from your Mutual Funds even the NAVPS is not favorable.

    Thanks Mr. Fitz for sharing this article. And I would like to ask a permission from you if I could share this article to my friends over a classroom lecture.

    Thank You.

  12. malene says:

    I also have a Kaiser Healthcare plan. Why did i get it? Because I have been exposed to having a health card such as Aetna and Maxicare from my previous companies in the Phils and now my company here in SG has also provided the same. Apart from it is convenient to use, it come with a certain security that you have something to use – no cash required. The peace of mind and comfort to be able to afford to go to good hospitals such as Makati Med, St. Lukes and the likes. On other side I also felt the need to have one not for myself but for my younger sister when she had an accident that we all thought it is something critical that we were so worried that we all wanted her to be immediately checked by the doctor but the hospital employees wouldnt do the procedure just yet because you need to pay the deposit first and it will be a delay if I wasnt able to shell out 10K. Anyways so much with that experience.
    If you have a HMO card all you have to do is present it and viola it feels like you have a cash on hand. Going back to Kaiser please read my article at the link:
    http://mals-mindspeaks.blogspot.co.uk/2012/08/health-is-wealth.html

  13. Ysera says:

    Hi Fitz. You know, I’ve been really curious (as well as cautious) of Kaiser Health Group. I’ve joined IMG so I’m fairly informed about Kaiser but I also decided to do research on my own. Why did I do this?

    1. For me at least, Kaiser sounds too good to be true. They promise to offer healthcare FOR LIFE. I cannot find any other Healthcare provider that does the same. I think only Coco Life offers the longest at age 80. Actually, I visited your blog in the hopes that I could find a list of health care providers in the Philippines and how long they provide service. (But that’s off topic now.)

    2. Kaiser has only been incorporated last 2004, a little too new for me. If people bought their product at that time, it would have taken (if I remember correctly), 15 years to mature. Therefore, I don’t think anyone has claimed their investments yet from Kaiser, or made use of the healthcare at their old age. If you or anyone else has actually benefited from Kaiser, I would love to hear about it.

    3. When I talked to my friend who introduced me to IMG, he couldn’t give a clear picture of how Kaiser invests and grows the premium that I will be paying. Will it be invested in equities, bonds, treasury bills? I wanted to know how they can promise an investment with a fixed rate of return per year and how safe my investment will be. I kinda can’t help but think about CAP.

    4. And frankly, I’ve never heard of Kaiser until I set foot in the IMG office. There is almost zero information about them from the internet aside from their own website. They are not affliated with Kaiser Permanente but the names are suspiciously similar.

    I’m still looking for a good Healthcare plan to buy for myself and my family, preferably a long term one that provides healthcare past age 60, like Kaiser does, but until I’m confident in the company, I think I’m going to have to wait and do more research first.

    I’d love to hear your thoughts about this, Fitz. Thanks.

  14. Jonathan says:

    Ysera,

    We have the same feeling about this company. I also prepare insurance and investment to be separate rather than it be rolled into one. It’s better to pay for term insurance and then the rest of your money be use to fund an emergency fund (if you havent fully fund it, for emergency happens!), paying off debt (if your still not yet debt free) and retirement. I myself have term insurance for myself and my wife which is so cheap, I’m debt free, and putting atleast 30% of my gross income into retirement. I’m 33 years old and I hope my saving for another 27 or so years would be enough to ensure me for any storm that would hurt my financial well being.

    I guess the question now is what is the cheapest term insurance available now in the Philippines with the reasonable coverage. I’m currently an OFW here in Singapore and I pay S$40/month (Php 1,320) for a S$200,000 coverage(Php 6,600,000). I would like to recommend to my friends in Manila a good term insurance in the Philippines that is hopefully cheap but with good coverage. I hope that there are more companies who can beat Singapore’s insurance price range.

  15. Fitz says:

    Hi Ysera,

    Thank you for the questions, they are all valid concerns.

    Personally, I consider Kaiser as a VUL product in the long term horizon. Primarily because their offer is very similar to VUL products being offered by other life insurance companies.

    Moreover, yes it takes 15 years total for the product to mature, and it is indeed a concern if they’d be able to fulfill their obligations when time comes.

    But having the medical benefits (health insurance part of the product) during those 15 years is enough to convince me to take that risk, and see what happens.

    With regards to people who actually benefited from them, I think the best source (for now) is their testimonials page.

    http://www.kaiserhealthgroup.com/testimonials.php

    Furthermore, I believe your friend misunderstood how Kaiser works because as it was explained to me, they don’t promise a fixed rate of return and the tables they have only shows “potential” earnings for 10% pa return. It is stipulated there that actual annual increments will be based on prevailing market rates.

    Also, I remember asking my IMG recruiter where they are investing the premiums to which he said he’ll get back to me on the question. Thanks for reminding me, I’ll ask him again.

    Interestingly, I likewise never heard of Kaiser until I met IMG, so that also raised some concerns on my part. My initial online searches then led me to Kaiser Permanente, which encouraged me to do a fair amount of due diligence.

    In the end, I did not find any connection between the two companies.

    So I guess the question now is, why did I join IMG and why did I get a Kaiser Premium Health Builder.

    First, deciding to join IMG was an easy decision because I wanted to attend all their seminars. P3,700 is very cheap considering the amount of knowledge you can get from their talks, specially when they hold special sessions and invite financial experts to their office.

    Meeting people whom I can network professionally with is the icing on top of that benefit.

    Now, why did I get Kaiser? Well, because I already have term life insurance, short-term health insurance and various types of investments in stocks and funds.

    Having done that allowed me to explore other types of “second-tier investments” such as VULs. I was actually considering getting one from Philam, but then I met IMG and thought Kaiser was a better fit for my objectives.

    I also tried to look for similar products in the Philippine market, and unfortunately, it is only Kaiser that offers long-term health insurance. But if ever you do find one, please share it here so I can look at that as well.

    In any case, I only availed the K-50 plan of Kaiser, primarily because that’s what I’m comfortable to invest with them – a sum which I can accept losing if ever they fold as a company in the future.

    To many, that is a very risky move – but for me, it was something I can afford to take.

    A lot of my friends actually asks me, what if Kaiser closes in the future like CAP? My only answer to them is, “What if they don’t?”

    In the end, I guess it’s a matter of perspective, and one’s emotional risk tolerance.

    So where does this all bring us?

    My personal advise. Get a term-life insurance (die too soon), and invest in high-growth funds such as equities and stocks (live too long).

    After that, you can start investing in VULs and other “second-tier” products such as Kaiser, to diversify your portfolio.

    I guess that’s it. I hope I was able to clarify some of your concerns.

  16. Fitz says:

    Hi Jonathan, thanks for the suggestion. I’ll do some research on term life insurance in the Philippines.

  17. Ysera says:

    Thanks for your comments Fitz.

    Yes, the medical benefit is very tempting and is the sole reason why I am even considering their product in the first place.

    The testimonials in their website, unfortunately, only pertain to insurance in case of accidental death. There was no mention of actual heath care provided, but I guess this is because nobody’s plan has matured yet given their 2004 incorporation date that I already mentioned.

    Thanks. I may have misunderstood the 10% return and considered it fixed. Still, having that out clause also means possible lower returns than if I had invested in, say, mutual funds, or stocks. (And less stress, too!)

    If you could post your recruiter’s answer regarding the premiums, it would be highly appreciated.

    Ah, so you did not avail of their bigger plans. Then at least that confirms that I may not be the only one overly cautious about the company. Though I agree with you that if Kaiser does not close down, their products would probably be one of the best out there, I still believe that I would rather have peace of mind than make a gamble right now for something that may prove crucial in the future.

    For things like long term healthcare, I think the best course of action is to stick with tried and true companies that are still standing despite the ups and downs of our economy and the volatility of the insurance/healthcare sector.

    As for your personal advise, I already have both term insurance and several growth funds that I hope I won’t touch until I retire. =) So basically, I’m already looking at 2nd tier investments.

    When I get around to actually inquiring about various health care products in the Philippines, I’ll be sure to let you know what I find.

    Thanks again. It’s always a pleasure to read your blog.

  18. Fitz says:

    Hi Ysera, I’ve been able to talk to my recruiter and he says that the funds are being handled by a group of fund managers and a majority of it is invested into IMG investment partner products such as FAMI, PAMI and Philequity.

    One of the fund managers is Mr. Rex Mendoza, who is interestingly the CEO and President of Philam Life, among other titles.

    Honestly, I have high hopes for Kaiser because it’s really a great and sustainable product on paper; unfortunately, without decades of performance, all we can do for now is give our trust that they’ll fulfill their obligations in the coming years.

  19. Ysera says:

    Thanks Fitz. That is good news, at least, if they’re putting it in quality mutual funds. Is this “group of fund managers” listed anywhere? I can’t seem to find the information on their site.

  20. Jessie says:

    Hi Fitz,
    Is it a requirement to purchase a kaiser product when joining IMG? I would like to join for the seminars and other products, but not Kaiser. And it seems they’re really pushing for us to purchase this.

  21. Fitz says:

    Hi Jessie,

    No it is not a requirement. Have you talked to Dr. Jaime Lorenzo? Tell him I referred you, and advise him those intentions so he help you accordingly.

  22. tet says:

    hi sir, i joined the first seminar at KINGS COURT..so far so good..id like to invest in mutual fund but same with Jessie, i do not like to push through on signing Kaiser..you said it isnt a reqt..so you mean, i can invest on mutual fund without Kaiser? tnx!

  23. Fitz says:

    Hi tet. Yes it is not a requirement to invest. Kaiser is only required if you want to do the business and earn. Please talk to your MD about it.

  24. Gerald says:

    Hi, IMG’s main purpose is for us to build our Solid Financial Foundation which comprises of the following: Healthcare, Protection, Eliminate Debts, Emergency Fund & Investments. If you already own a Long-term healthcare plan from other company then you don’t need to own kaiser. But if you don’t have yet, i would recommend to own kaiser as well. Anyway, it’s for you – not for anybody else. After Kaiser, buy a Term Life Insurance (now Philamlife offers it through IMG), then set-up your emergency fund, aim to eliminate debt along the way, and lastly invest.. This way, you Solid Financial Foundation is completed. This is why I loke IMG much as they don’t only focus to investing alone, but to building a financial future the proper way. Hope it helps. :/)

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