As the saying goes, “expect the unexpected.” The very nature of emergencies means that you never know when, where, and how they will happen. Nevertheless, they do happen and when they do, we’d better be prepared. The costs of hospitalization as well as home or car repairs due to accidents and calamities can be staggering, especially for many Filipinos who struggle to make ends meet.
Emergencies can devastate finances with dire consequences on the well-being of the family, especially the breadwinners and income earners. The best way to deal with emergencies is to plan for them and take steps to minimize their impact on our finances.
Set up an emergency fund through term and build-up deposits and augment with low risk investments.
Having an emergency fund can prevent you from resorting to high-interest debts or selling investments at a loss or prematurely disposing of assets. An emergency fund equivalent to six to eight months of your monthly income should help cushion the impact of large, sudden expenses. The key is to set aside a portion of your income monthly for “untouchable” savings in build-up deposit products such as BPI’s Pamana, Save Up, and Maxi-Saver, which provide you higher interest earnings or free insurance coverage.
When you have saved enough, consider subscribing in trust funds, where you can easily contribute a small amount monthly, such as the BPI Short Term Fund, a Unit Investment Trust Fund (UITF) which has low risks and a higher return potential compared to traditional deposit products, and is primarily invested in BSP Special Deposit Accounts, time deposits, and short-term securities. You can start for a minimum initial contribution of just P10,000 and P1,000 thereafter, and there is no holding period for this fund so you can sell your units whenever you need money without having to worry about early redemption fees.
Be protected with insurance products for your health, car, and home.
To this day, many Filipinos are still reluctant to get an insurance policy, because they are unwilling to spend on something they may not end up using, as it only becomes valuable should the unfortunate incident that they are insured against happens.
While it is indeed the sort of investment you don’t want to claim, it helps those who are insured to find relief when the need does arise. Those who refuse the opportunity to get insurance find themselves regretting their decision.
To counter the perception that life insurance is expensive, BPI-Philam gives qualified individuals life and disability insurance coverage of up to P1 million for as low as P320 per month. There are also plans that allow you to earn from your insurance investment, while you have assurance that your emergency health needs are covered.
For health issues that require hospitalization, BPI/MS has a Hospital Confinement Income Protection plan which provides cash benefits for each day of hospital confinement due to an injury caused by an accident or a covered illness, so clients can focus on their recovery without having to worry about providing for their families.
With nearly 12 million cars registered in the Philippines (over three million in Metro Manila alone), hundreds of auto insurance claims are filed daily. Car repairs can run up to the tens or hundreds of thousands of pesos, so having the insurance to shoulder these costs would go a long way. Some auto insurance providers, such as BPI/MS, provide free Express Roadside Assistance (ERA) services along with comprehensive protection.
Home ownership is one of the ultimate dreams of every Filipino. Many of us have to work and save for years to finally get it, so it makes sense that you take steps to protect your family home in case of fire, natural calamities, or human actions.
Have standby credit lines in the form of credit card installment financing, personal loan, or property equity loan.
When your situation gets financially overwhelming and you have not been able to subscribe to any plan yet, keep in mind that you won’t need to take out money from your savings as there are multiple other ways to pay for the necessary healthcare and other emergencies. Banks such as BPI offer zero interest rates in partner hospitals for credit card installment payments, for loans of up to a certain amount.
Apart from using credit cards, you may also get as much as three times of your gross monthly income with BPI’s Personal Loan, or Property Equity Loan where you can get as much as the value of your home with only 6.88-percent fixed interest rate for three years.
As you can see, there are a number of ways to help you prepare for emergencies. Ultimately, preparation is still the best plan. Do it now before it is too late.