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April 25, 2020

The Breadwinner's Guide to Life Insurance

By: Ysa Benitez

InLife Financial Advisor

Unit Manager, EYJ Insurance Agency, Inc.


Why should breadwinners get insurance for EVERY member of the family?

 

It was 3:00 am and my mobile phone rang, reflecting the name of a valued client. She was a millennial businessowner who had been my client for two years at that time. I immediately felt my heart race because as an insurance advisor, we panic whenever we get calls from clients in the wee hours of the morning. 

 

I picked up and heard her ask, “Hi Ysa, sorry to call you this late but I was just wondering if I can transfer my insurance to my Mom? She’s in the ICU right now and we’re afraid we might not be able to afford all the expenses that are coming up. Mom just had a heart attack.”

 

My heart sank. 

 

Life and health insurance plans are not transferrable. When insurance companies evaluate an application, they approve it based on your current personal risk profile – your age, occupation, state of health, and other factors. Hence, the decision when they approve your application is unique to your personal information. 

 

I felt really bad that I could not do anything to help her at that point. I remember asking her back then if she could refer me to anyone else in her family. She said she would ask them. I checked back later on and she said they couldn’t prioritize it just yet because they had too many expenses. Looking back, I should have pushed harder. She had been a good client for two years. I was so focused on protecting her that I failed to protect the people she loves. 

 

What made the situation worse was that her mom was a stay-home mom who took care of everybody in the familyShe had no knowledge of a heart condition. She was in a perfectly healthy state when I met her daughter – she was qualified to get insurance. 

 

Her mom passed away a few weeks later and left a huge pile of hospital bills for her three children to settle. They all had to pool their resources together to pay it off. All this on top of other fees and expenses posthumous. This hurt their savings significantly.

 

This was a huge turning point for me, six years ago, as a rookie insurance advisor. This was the time I realized the importance of getting every member of the family covered to protect the financial impact it will make to breadwinners. Since that day, I have made a promise to always talk to my clients who are the providers of their families to protect EVERY member of their household (even their loyal house helps and drivers!). 

 

My responsibility as a financial advisor doesn’t stop when I’ve protected the risk of the breadwinners. My responsibility extends to the people who depend on their income as well (their spouses, their children, their parents, extended family) because if anything were to happen to them (illness, death), it would boomerang back to the breadwinner. They would be forced to use up their savings and I would be unsuccessful in protecting their income. Moreover, the family would have a difficult time coping and recovering. 

 

Moral of the story: Get everyone in the family protected, not just the parents. Illness knows no age. Always check on your coverages and update them always with your financial advisor to ensure that you have enough. We are living in uncertain times and the best weapon for certainty is preparation. 

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