Tuesday, April 17, 2007 Insurance company launches ‘forfeit-free’ pre-need plan in Cebu
THE pre-need arm of an international insurance company has committed to become the “solution” of the pre-need sector’s problem on lapsed plans and plan terminations.
Philam Plans Inc. of the Philam group of companies has introduced to Cebu its latest product line called iPlan, which is described to be a “forfeit-free” pre-need plan.
This means plan holders will not lose their cash value due to a lapse or cancellation.
“We have listened to the needs of our plan holders and are providing them with the first product that protects their investment even when their ability to pay is jeopardized,” said Philam Plans president and chief executive officer John Howell.
Once a plan has lapsed under the current pre-need industry, the plan holder subsequently forfeits all cash value and any future maturity without a reinstatement of the plan.
Once it lapses or terminated, the money goes to the company.
But through iPlan, every cash value of the plan is preserved, Howell said.
“If you have a five-year paying period but can only pay for only two, three or four years, we preserve your cash value and mature it,” he said.
The iPLAN’s Cash Saver feature will secure the cash value of the plan, enabling the plan holder to receive the maturity benefit, even if the plan holder cannot complete the payment.
This feature is a “clean improvement” and the first in the Philippine’s pre-need industry, Howell told Sun.Star Cebu during the product launching at the Philamlife building along Osmeña Blvd.
Interested plan holders may avail themselves of the product for as low as P1,030 per month to as high as P26,000 monthly.
Howell said because the nature of the plan is flexible, an individual can choose a paying period, maturity period, insurance and accident and health riders.
“More importantly, iPlan is guaranteed,” he said.
Howell is optimistic that Philam Plans will reach a bigger share of the market now that the plan has been officially rolled out.
But despite it being forfeit-free, Howell emphasized the need for plan holders to pay their obligations in order to avail themselves of the full maturity benefit, where the returns are higher.
He said iPlan should not be perceived as an excuse for plan holders not to pay their obligations.
“The goal should be to make all payments,” he stressed.
Currently, iPlan is available for Philam Plan’s pension product, but Howell said a forfeit-free plan will soon be available in the local market for education and memorial plans.
It will be rolled out in the next few months, he said.
“The company’s goal is to have all pre-need plans as ‘forfeit-free’ to avoid misrepresentation,” Howell said, adding that it took Philam Plans a year to develop the strategy that “truly” answers the need of the pre-need industry.
Philam Plans is a wholly owned subsidiary of The Philippine American Life and General Insurance Company (Philamlife).
It is a member company of the American International Group Inc., an international insurance and financial services organization with operations in over 130 countries and jurisdictions. (MMM)
