Global Recession 2023
The start of 2023 made many economic experts foresee a global recession. Considering this development, what steps should consumers, especially family breadwinners, take to ensure financial security despite the economic uncertainty?
BDO Unibank recently held an online seminar, “Life Insurance: Plan B against Economic Uncertainty” to help ordinary consumers answer this question. Financial guru Chinkee Tan hosted the seminar, making the information easier to digest and understand.
BDO Unibank SVP and chief investment officer Frederico Rafael “Fritz” D. Ocampo clarified that a recession destroys businesses. If not adequately handled, it may lead to downsizing, layoffs, and even closures. Curtailed expansion of enterprises may also happen. And if this occurs, its impact may be too significant and may be beyond our control to manage.
In this light, Ocampo advised individuals to re-evaluate their investments and better align their investment horizon to their risk profile.
Ocampo added that life insurance remains essential to improve one’s family’s financial safety and survival, especially during challenging economic environments. “The more a person needs financial protection in place during difficult times to secure the family’s financial dignity in events the breadwinner finds his untimely death,” he said.
Plan B Against Economic Uncertainty
On the other hand, Renato Vergel de Dios, President and CEO of BDO Life, shared that during a recession, an individual’s intent and purpose (or ‘Plan A’ for short) are under a more severe threat. Commonly referred to as one’s program of savings and investments, Plan A often comes from a person’s savings from his salary, professional practice, or business.
“Having a Plan A in place is vital for any responsible head of the family. Moreover, completing a Plan A promises enjoyment of the lifestyle one seeks and desires, especially in his less active retirement years,” de Dios expressed.
De Dios further stressed that life insurance protection is the cornerstone of every family provider’s Plan A. And this is referred to as Plan B. This enters when the family’s primary income earner dies unexpectedly and prematurely. Plan B narrows the gap that an aborted Plan A leaves. Imagine how hard life can be if the family’s breadwinner dies, especially during high inflation.
Plan Long term
This makes securing life insurance protection a wise decision, even during economic uncertainty. Simply put, it manages the apprehension of untimely death and its threat to the family’s quality of life. Losing the primary financial provider is challenging enough in normal times; how much more during a challenging economic environment?
De Dios detailed that the life insurance proceeds will then fund the family’s everyday needs like payment for the monthly utility bills, the children’s education, and even as a modest capital to start a small business.
Ready or not for a likely economic recession this 2023, today is the best time to ensure we put a financial Plan B in place. For more details on how BDO Life can help you jumpstart your Plan B, visit a BDO branch near you. You may also visit BDO Life.
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