Most people I know are confused with the difference between pre-need plans and insurance policies. As someone who worked in the insurance industry for several years I think I am in the authority to shed light on any misconception or wrong notion one might have about the two.
1. Pre-need plans tend to be cheaper than most insurance policies.
2.Pre-need plans do not give you protection while insurance policies do.
If one buys a college educational plan, and he dies after a year, his child will not
yet get the benefits of the plan. Instead, the child will have to wait for years, until
the plan matures, usually when he is already ready for college. Meanwhile, the surviving parent is left with the problem of earning a living enough to send the child to grade school and high school.
3.If one buys an insurance policy with savings that can be used any which way, like for college and he dies after a year, the child will be able to get the fund right away and use it for his everyday necessities or yearly tuition so that someday he will finish grade school, high school and possibly go to college.
4.Both pre-need plans and insurance policies can give pension after some time but if a holder of a pre-need pension plan suddenly dies after a week, the beneficiaries will just get whatever payment he has already paid.
If a person with an insurance policy dies after a week of getting the policy, his
beneficiaries will still receive the whole coverage amount. For instance, he has only paid one quarterly premium of Ps. 4,000.00 for a one million peso coverage, his beneficiaries will still be able to get the whole Ps. 1,000,000.00, assuming he did not lie in the medical questionnaire part of his application.
5.Pre-need companies are under SEC while Insurance companies are regulated by
the Philippine Insurance Commission. If an insurance company is in financial
trouble, another insurance company is obliged to take over, and absorb all the
financial liabilities of that company. This way, policyholders are always secured
that they will get the benefits they are paying for.
Showing posts with label money. Show all posts
Showing posts with label money. Show all posts
Tuesday, June 30, 2009
Saturday, June 13, 2009
Smart Spending and Saving Tips
People all over the world are suffering from the effects of the economic crisis and with the way prices of basic commodities are increasing every month it’s getting harder and harder for ordinary citizens to budget and save money. But with some smart spending we can still survive. I’ve listed five tips on spending and saving below.
1. Save before you spend. Most of us spend before saving. You have to do it the other way around. Save first. Allot at least 10% of your monthly take home pay for your savings then spend the rest on bills, daily allowance, rent, etc. During my first year of work after graduation, my salary was a little more than Ps. 5000.00. I opened my account (with an initial deposit of Ps. 2000.00) on the day my first salary was given to me and promised myself that I would deposit at least Ps. 2,000 every month thereafter.Without fail, I deposited money every 10th of the month (we got our salaries every 10th)and on my 9th month as a working person, I opened my first time deposit at BDO with Ps. 20,000.00.
Of course, I was able to do this because my dad took me to and from work, I wasn’t obliged to pay for anything at home and I usually brought packed lunch to work. I didn’t spend much on clothes or on night outs because I was so motivated to save, I was working for a goal. But what I’m saying is if you really want to save something, even if it’s just Ps. 500 every month, you’d be able to have at least Ps. 6,000.00 after a year.
2. Resist the urge to go to the malls. We Filipinos spend way too much time at the malls. Most of us go to the malls just to relax and cool off. But even if we do not have any plan to buy anything, there is still this big possibility that we would end up buying something which is not in our budget plan. Cute gizmos and thingamabobs attract us and tempt us to spend our money. Little things like these may cost Ps. 50.00 – Ps. 100.00 every mall visit. If you visit the mall around six times a month that would mean spending a minimum of Ps. 300.00 a month. This does not include the money we spend on food every mall visit and the money we spend on gas, parking or transportation. Besides, if we do not have money to spend on our wants, the malls just cause us to be more discontented with our work, with our husbands and with our life in general.
Limiting our mall visits to a minimum of twice or thrice a month will not only help us save money. It will also allow us to be more creative in the way we spend our time with our children. It will also help us to be more productive as we would have more time doing the things we need to do, like cleaning our room, sorting our files, learning new skills, etc. Most importantly, we lessen our use of gas which is one of the causes of global warming.
3. Shop for clothes after Christmas or in May. This is the time when a lot of the stores/malls have their sale. You can buy really nice office tops and pants at half the price and sometimes even more than half the price. Some boutiques like Mango, Zara, Plains and Prints, Bayo allow customers to fit the clothes so it’s good to check these stores out during sale season.
4. Bring packed lunch to work. A usual lunch at the office cafeteria will usually cost you
Ps. 80.00-Ps. 100.00. Multiplied by 5 days, you’d be spending a minimum of Ps. 450.00 a week, and a minimum of Ps. 1,800.00 a month but if you bring your lunch to school you’d only be spending a minimum of Ps. 200.00 a week or Ps. 800.00 a month.
5. Limit the number of your credit cards to one. Credit cards give us a false sense of bigger purchasing power. Back in 2000, I had at four credit cards. I had Ps. 40,000.00 credit limit on one, and Ps. 10,000.00 credit limit on each of the other three cards. Having these cards in my wallet made me feel I could buy anything that I wanted even if I only had Ps. 500.00 left from my take home pay. In reality, I only had Ps. 500.00 because that’s the only amount I had. But because I had all these credit cards, I bought and I bought and I bought. I was spending more than what I was making. That’s not purchasing power at all. Fortunately, I had the good sense to freeze all of the cards while I paid for my dues. I paid Ps. 3,000.00 every month for one of my cards, it took me three years before I was cleared of my debt. More than half of what I paid was only for the interest!
It’s good to have a card. We need it for traveling and emergencies. But it would be wise if we keep it only for these purposes. I keep only one card now and I never put it in my wallet except when I go to a different country.
I hope you find these tips helpful. I’ve tried them all. It wouldn’t hurt you to give them a try too. If you have other tips that may come in handy, feel free to leave me a message. I’d like to save more.
1. Save before you spend. Most of us spend before saving. You have to do it the other way around. Save first. Allot at least 10% of your monthly take home pay for your savings then spend the rest on bills, daily allowance, rent, etc. During my first year of work after graduation, my salary was a little more than Ps. 5000.00. I opened my account (with an initial deposit of Ps. 2000.00) on the day my first salary was given to me and promised myself that I would deposit at least Ps. 2,000 every month thereafter.Without fail, I deposited money every 10th of the month (we got our salaries every 10th)and on my 9th month as a working person, I opened my first time deposit at BDO with Ps. 20,000.00.
Of course, I was able to do this because my dad took me to and from work, I wasn’t obliged to pay for anything at home and I usually brought packed lunch to work. I didn’t spend much on clothes or on night outs because I was so motivated to save, I was working for a goal. But what I’m saying is if you really want to save something, even if it’s just Ps. 500 every month, you’d be able to have at least Ps. 6,000.00 after a year.
2. Resist the urge to go to the malls. We Filipinos spend way too much time at the malls. Most of us go to the malls just to relax and cool off. But even if we do not have any plan to buy anything, there is still this big possibility that we would end up buying something which is not in our budget plan. Cute gizmos and thingamabobs attract us and tempt us to spend our money. Little things like these may cost Ps. 50.00 – Ps. 100.00 every mall visit. If you visit the mall around six times a month that would mean spending a minimum of Ps. 300.00 a month. This does not include the money we spend on food every mall visit and the money we spend on gas, parking or transportation. Besides, if we do not have money to spend on our wants, the malls just cause us to be more discontented with our work, with our husbands and with our life in general.
Limiting our mall visits to a minimum of twice or thrice a month will not only help us save money. It will also allow us to be more creative in the way we spend our time with our children. It will also help us to be more productive as we would have more time doing the things we need to do, like cleaning our room, sorting our files, learning new skills, etc. Most importantly, we lessen our use of gas which is one of the causes of global warming.
3. Shop for clothes after Christmas or in May. This is the time when a lot of the stores/malls have their sale. You can buy really nice office tops and pants at half the price and sometimes even more than half the price. Some boutiques like Mango, Zara, Plains and Prints, Bayo allow customers to fit the clothes so it’s good to check these stores out during sale season.
4. Bring packed lunch to work. A usual lunch at the office cafeteria will usually cost you
Ps. 80.00-Ps. 100.00. Multiplied by 5 days, you’d be spending a minimum of Ps. 450.00 a week, and a minimum of Ps. 1,800.00 a month but if you bring your lunch to school you’d only be spending a minimum of Ps. 200.00 a week or Ps. 800.00 a month.
5. Limit the number of your credit cards to one. Credit cards give us a false sense of bigger purchasing power. Back in 2000, I had at four credit cards. I had Ps. 40,000.00 credit limit on one, and Ps. 10,000.00 credit limit on each of the other three cards. Having these cards in my wallet made me feel I could buy anything that I wanted even if I only had Ps. 500.00 left from my take home pay. In reality, I only had Ps. 500.00 because that’s the only amount I had. But because I had all these credit cards, I bought and I bought and I bought. I was spending more than what I was making. That’s not purchasing power at all. Fortunately, I had the good sense to freeze all of the cards while I paid for my dues. I paid Ps. 3,000.00 every month for one of my cards, it took me three years before I was cleared of my debt. More than half of what I paid was only for the interest!
It’s good to have a card. We need it for traveling and emergencies. But it would be wise if we keep it only for these purposes. I keep only one card now and I never put it in my wallet except when I go to a different country.
I hope you find these tips helpful. I’ve tried them all. It wouldn’t hurt you to give them a try too. If you have other tips that may come in handy, feel free to leave me a message. I’d like to save more.
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