Wednesday, June 14, 2017

BPI Savings Account With Free Life Insurance

With the spawning of insurance products left and right, it is getting harder to properly decide on what product to get. I personally got influenced at one point (2016) and became an insurance agent who can sell traditional and investment linked products. My drive was to understand the insurance industry better and recommend those to my loved ones + employees. Back in Oct 2016, I got a full equity VUL for our driver costing P18,000 per year premium which covers him P500,000 until age 100 plus fund price appreciation gains if any. This for us was a really great reliever knowing that no matter what happens to our driver, his family will be covered for. This is what life insurance is for. Its for peace of mind, not capital appreciation (for me). I got a life insurance from a friend before and totally regretted it since my focus was capital appreciation which was not what its for. So up until now, the fund chosen is still losing money and I am not happy with it. LIFE INSURANCE IS FOR LIFE COVERAGE emergencies, it is just to ensure that no matter what happens your loved ones' lives will continue with lesser hardship due to your passing. So if ever you want me to assess your needs or profile, send me an email or comment below. I am still a licensed life insurance agent.

But life insurance products offered by companies have premiums which policy owners pay monthly/yearly/ or on a specific schedule. This can be chaotic if mismanaged since it can balloon and can be big hit in savings since it is still a expense. Plus the ultimate clincher that these premiums technically increases over the years as you age since its more costly to cover an older person... to mitigate this, agents/owners pray that the fund chosen earns enough to maintain the policy paying its premium by itself. Even if your agent tells you that you only have to pay 5/10/15/ limited years, its not the whole truth since to maintain the policy the premiums have to be paid by either the owner or the fund earnings. So it appears as its an endless cycle of payments for me. 

So which brings me to an old product offered by BPI which I just recently read about. Its called BPI Getting Started > BPI Save Up / BPI Pamana. It's first version was BPI Getting Started which has higher and longer insurance coverage. But upon checking today, only BPI Save Up and BPI Pamana are available in the market. So how does this work?

Basically both functions like a regular savings deposit account which can earn 0.25% interest per year plus has premium-free life insurance which is based on your account's Average Month-to-Date Average Daily Balance (MTD-ADB) of the past three calendar months prior to Insured's demise. This for me is really amazing since it removes an unnecessary expense from my mind. BUT of course, BPI will not offer a product to which it will openly lose. Limitations of these products: Maximum of 2 Million Pesos coverage regardless of the number of accounts you open AND you are only insured until age 60. So this is still not a perfect product for all, since it would depend on why you need the insurance. I think its perfect for those people (like me) who want to have a peace of mind now that I do not incapacitate my loved ones at their young age... but once we get older, I think they can manage if something happens to me (or I want them to be responsible for themselves haha). A tactic that me and my husband apply is that since we have an emergency fund which just seats in a typical deposit account, we think it is best to put some of them in these kinds of products which serves multi-purpose. 

But these two are not the same even though they are similar, you can check the links for all details. But in summary:

BPI Save Up (need constant top up - x5 of ADB)

> Comes with an Info Card which must be enrolled online
> Need to have regular (weekly/monthly) automatic debit to Save Up account, at least P250
> Minimum maintaining balance of P1000
> Minimum balance of P5000 to earn 0.25% interest per year
> No medical check-ups required (subject to only 1 year contestability period)
> Insurance takes effect on the same day of account opening
> Applicable to individuals 15 - 60 years old
> Basic Life: 5x the account's average MTD-ADB** up to PHP 2 million
> Accidental Death: additional 5x the account's average MTD-ADB** up to PHP 2 million
> Accidental Dismemberment up to PHP 2 million
BPI Pamana (no need for top up - x3 of ADB)

> Comes in either ATM (maintaining P25000) or passbook (maintaining P75000)
> No need for top ups
> Minimum balance of P25000 (ATM) or P75000 (passbook) to earn 0.25% interest per year
> Insurance Coverage worth 3x the average account balance* up to Php2 million
> No medical check-ups required (subject to only 1 year contestability period)
> Insurance takes effect on the same day of account opening
> Applicable to individuals 15 - 60 years old
> Covered by PDIC

Related links worth visiting:

Overall, I think these two are good products which I recommend for emergency funds. They are both easily accessible and can be withdrawn like a normal bank account. I suggest that you check these out. I opened mine in just 30 minutes, they just asked for 2 government IDs and my existing online account. Here is to peace of mind at no cost. ^____^