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Staying protected in a pandemic-ridden world

As we face the pandemic and the uncertainty it brings, many of us are feeling anxious. Lately, we may have been opening our emails with, I hope this message finds you in good health” or ending them with, “Stay Safe!”

Is there anything we can do to ease our fears and worries? Someone who has sage advice on this is Renato A. Vergel De Dios, President and CEO of BDO Life Assurance Company, Inc. 

Vergel De Dios, fondly known as “Ato” among colleagues, has made service to others and risk mitigation his life’s calling. For him, insurance is both a selfless service and one of the best sources of protection.

To Serve and Protect

During the early days of the lockdown, Vergel De Dios asked BDO Life Financial Advisors (FAs) to call up their clients, not to sell them anything but rather, to check on how they were doing, reassure them that their coverage will respond to COVID-related claims, and offer assistance.

Many forget that an insurance policy provides protection. It primarily serves as a safety net and a source of financial security for the policyholder and his or her family. 

“I reminded our financial advisors that their first role is to make sure their clients’ protection is in order. This pandemic regrettably exposes us to serious risks to our health, our jobs, and even our lives. People are feeling anxious about the future. They worry for themselves and especially for their families,” Vergel De Dios said.

He added, “Our clients need to feel that amid these terrifying risks, they can rely on us to help ease their worries and extend to them a safety net, that much-need protection for their peace of mind. I told our team, ‘Kumustahin niyo naman mga cliente niyo. Mahirap ang buhay ngayon. Tanungin niyo kung ano na ang kalagayan nila. Ipaalam niyo na nandiyan kayo para tumulong. Put service above all other considerations.

Vergel De Dios believes that insurance is a philosophy, a way of life and thinking with the concept of protection at its heart. This pandemic has raised awareness about the serious need for greater protection at a time when the focus of many has been on the investment aspect of insurance policies. 

“I do not belittle investment-oriented insurance. They have a specific role to play as part of the financial planning toolkit. But the investment part is, in reality, a side benefit. The main value of life insurance lies in the immediate monetary protection that no other financial instrument can provide. If you overlook that, you are shortchanging yourself. But, if you have the right mindset, then you know that being protected by insurance is the very foundation of the better life that you want for yourself and your family, no matter what may come next,” he said.


Protection and the Financial Planning Pyramid

For Vergel De Dios, having insurance is crucial at this time. Unfortunately, there’s a misconception that insurance is primarily an investment instrument, and only those with extra cash to “invest” can have it. This mischaracterizes the value of protection as being optional. Life insurance protection, he emphasized, is the foundation of every family’s financial well-being.

“We all need to be financially prepared. Imagine those who are unable to work because of the pandemic and worse, lost their jobs. If they didn’t have savings or an emergency fund, what would happen to their families? Imagine something even worse: if the breadwinner passes away, how will the family survive? Financial security is something we must take seriously, especially now,” he said.

diagram BDO Life

Vergel De Dios referred to the financial planning pyramid.  A pyramid stands on a wide base. That makes it very stable and secure, almost impossible to topple. Your insurance protection, short-term savings, and emergency funds form your strong base. Without them, your financial foundation will be small and narrow. Kayang-kaya itumba ng bagyo.”

Moreover, he explained that life insurance, savings, and emergency funds are best accumulated when a person is younger, ideally in his or her 20s.

“When you are starting out, you have no wealth, unless you’ve inherited some. Your most valuable asset is your potential to create wealth—your income-earning ability. Over the succeeding years, you will realize that potential and hopefully, build enough wealth. Since accumulating wealth takes time, your strategy must be to protect your most valuable asset with life insurance, and to periodically review the amount of your protection.

“As you enter the wealth accumulation stage, you will still need protection. Even when you’ve climbed further up the financial pyramid into the wealth-building stage—where you enhance your earnings by having adequate investments to enjoy a passive income stream at a desired point in time—you need financial risk protection in case your investment horizon is disrupted.

“You may be earning well now, but what if you get sick and are suddenly unable to work? What if a pandemic strikes and businesses are shut down for social distancing? Your earnings may dry up. Without health insurance, life insurance, savings, and emergency funds, you and your family are at greater risk,” he said.

“The key lesson,” Vergel De Dios said, “is to ensure that our financial planning pyramid is firmly anchored on a broad enough protection base to mitigate life’s risks.” 

Life insurance is an indispensable part of that protection base. It is the only financial instrument that can instantly convert an individual’s unrealized earning capacity into a ready cash fund, in the event one’s ability to earn is disrupted by death.

BDO Life provides clients with life insurance products that assure a more comfortable, dignified, and secure family life. Especially in times of a crisis, BDO Financial Advisers are on standby to help clients find the protection and security they need. You can get in touch with them at www.bdo.com.ph/bdolife/connect-financial-advisor

Best of all, BDO Life is backed by the country’s largest bank network. This means clients get the support they need by simply going to their bank branch or through online transactions.

value of life insurance
Ready for Life’s What Ifs. BDO Life launches a new online video about the value of life insurance in facing life’s ‘what ifs.’ It is available on the official YouTube page of BDO Unibank.