Global Recession 2023 — and Your Plan B Against Economic Uncertainty

Building wealth and retirement nests from savings, investments, and provident funds may be a familiar financial plan to you and to many Filipinos — and that is the typical Plan A.

Your life and your income-generating power, however, are always uncertain. The economy is also uncertain. In fact, a new economic recession has been a looming threat to billions of workers and their sources of income across the globe.

It is not anymore a matter of if, but when. You just need a Plan B — financial protection for your loved ones in the face of these uncertainties.

The online seminar held this afternoon, “Life Insurance: Plan B Against Economic Uncertainty,” organized by BDO Life and hosted by financial guru, Chinkee Tan, brought new and valuable insights into insurance products and investments amidst post-pandemic life and economic uncertainties to hundreds of virtual attendees, particularly the media people and bloggers.

Don’t Get Caught Off Guard

In his opening spiels, Chinkee Tan stressed that nothing is really ever certain and permanent, but we should not get caught off guard by these life’s uncertainties. 

He said that while many Filipinos may have the ‘sulit’ mindset, buying an insurance policy is not about paying for the product itself but for the peace of mind. 

Life insurance ensures the breadwinner’s life for the financial security of the family and loved ones should the worst things — permanent disability, critical illness, and death — happen. 

There is no better time than today to get a policy as it gets more expensive and harder to qualify as one gets old and as the physical body declines.

Think and Plan Long Term

BDO Unibank, Inc. SVP and Chief Investment Officer Frederico Rafael ‘Fritz’ D. Ocampo, in his presentation of the economic indicators of the post-pandemic Philippines and the investment options for varying risk appetites, said: “Taming inflation usually requires slowing down economic growth by raising interest rates. It’s a tricky balancing act that central banks and policymakers need to tread carefully to avoid falling into recession. As everyone has seen time and time again, a recession is bad for businesses. At worst, this will mean curtailed expansion, possibly downsizing, layoffs, and even closures. When this happens, many families are impacted, the usual causes of which are beyond their control.”

Ocampo said that Filipinos need to re-assess their investments, especially around the riskier types, e.g., equities, to ensure they match with investment horizons and risk profiles.

“One instrument that many often dismiss as unnecessary but in fact remains essential to enhance one’s family’s financial security and survival, especially during challenging economic times is life insurance. The more difficult the economic environment, the more an individual needs financial protection in place, one that ensures the family’s financial dignity in the event of the breadwinner’s premature death,” he explained.

Think About What It Does, Not What It Is

Insurance expert and BDO Life’s President and CEO Renato Vergel de Dios, in his share of discussion on getting a life insurance amidst economic uncertainties, said: “During recessionary periods, people’s financial plans and goals (Plan A) are under a more severe threat. By Plan A, we refer to his program of savings and investment, which is funded by income savings from one’s salaried job, professional practice, or business.  

“For a responsible head of a family, having a Plan A in place is indispensable. Completing a Plan A is the means to enjoy the lifestyle one currently seeks as well as the desired lifestyle during those less active retirement years when one must rely largely on passive income to support personal and family requirements.

“The cornerstone of every family provider’s Plan A is life insurance protection. We refer to this as Plan B, which springs into action when the family provider dies prematurely. By injecting cash into the family’s account, Plan B narrows the gap left behind by an aborted Plan A. Without a Plan B, one can only imagine how much harder life will be for a family that just lost their financial provider, especially in times of high inflation.”

Spending for life insurance protection is a smart decision, even during periods of economic uncertainty. It addresses the uncertainty of death and its threat to the remaining family’s quality of life. Losing the family’s main income earner is challenging enough in normal times, what more if it happens during an economically uncertain environment.  

“From one’s life insurance proceeds, a family can fund their everyday needs, keep the children in school, pay for monthly utility bills, and in some cases, even provide a modest capital for a small business. As the saying goes, there are only two sure things in life: death and taxes. No matter what state the economy is in, whether in a robust upswing or entering into a creeping recession, failing health and premature death represent lingering risks to our family’s financial security,” Vergel De Dios said. 

Life insurance is a must for breadwinners. The world may be bracing itself for an economic recession, and it is beyond your control. But you can always prepare and ensure that your family and loved ones are protected by having your Plan B — life insurance.

BDO Life can help you start your Plan B. Visit a BDO branch near you or the BDO Life website. 

BDO Life Assurance Company, Inc., or simply BDO Life, is a wholly-owned subsidiary of BDO Unibank, Inc., the country’s largest bank to date. It offers a diverse pool of life insurance products suitable to the needs of its clients. 

BDO Life provides protection, health, education, savings, retirement, and estate planning solutions aimed to create a secure future for its customers and their families. It also extends comprehensive group term life insurance for corporate clients.

Read also:

How to Choose the Right Life Insurance for You [Guide for Filipinos].This article provides almost everything one should know about life insurance including ten (10) helpful tips on how to choose the right insurance plan.

Pandemic Exposes PH’s State of National Insecurity. Do You Have Your Plan B? – BDO Life. This article emphasizes the need to have a Plan B or safety net — life insurance — that will enable the family to recover from grief after the breadwinner passes away without being burdened by immediate financial worries.