Building wealth for health

Conventional wisdom says that health is wealth. But when an unexpected illness occurs within the family, this usually throws households off-balance, with majority being driven to heavy debt and about 95 percent depleting their savings, based on a study conducted by insurer Sun Life of Canada (Philippines) Inc.

Given this growing concern on healthcare expenditures, Sun Life recently unveiled a new insurance product that bundles life, accident, disability and health protection benefits and the potential for wealth accumulation in one product. This new health solution product is called FlexiLink Assist, which is designed for breadwinners and individuals in the prime of their productivity—between the ages of 18 and 55—and who want to boost their funds for health needs because they believe their savings are enough for medical emergencies.

“Our study showed that many Filipinos worry about their health, and that this concern affects their spending and saving behavior because a single serious illness or hospitalization can sometimes deplete one’s entire savings,” Sun Life chief marketing officer Mylene Lopa says. “With Sun FlexiLink Assist, the objective is for them to not have to choose between health and wealth anymore,” she says.

Sun FlexiLink Assist was thus conceptualized to offer comprehensive health benefits, wherein a policyholder can enjoy a stable source of funds for hospitalization or treatment of a critical illness which can help lessen the financial burden that comes with health emergencies. As a complete financial solution, the company said this product was also designed to allow the policyholder to accumulate funds for his other needs.

Asked whether this product competes with plans provided by health maintenance organizations (HMOs), Lopa said this new product augments rather than competes with HMO plans. “Usually HMOs have limits. You can use both HMO (and this product) for healthcare expenses. Also, HMO coverage ends when you leave your employer while you can use this for life, even if you resign from your company,” she said.

Also, she says HMOs have very specific coverage areas and typically don’t provide for miscellaneous expenses. “This is more flexible. As soon as you’re diagnosed with critical illness, it’s up to you how to use the budget, whether for a caregiver or a nurse,” she says.

Within a certain age and a certain threshold of face amount or death benefit, Sun Life can waive medical check-up as a requirement to avail of this product. The insurer has thus mapped out a flexible premium payment and paying period, which may be adjusted based on the policyholder’s needs and situation.

On premium payments, Lopa says these can be paid in five, 10 or 20 years depending on one’s budget. But she said this product is suitable even for young people earning at least P30,000 a month and who can set aside at least P10,000 for this healthcare-cum-wealth build-up solution.

For a face amount of P500,000, a 30-year-old non-smoker can pay: P31,315 annually (or P2,609.00 monthly) for a period of 20 years, P62,360 annually (or P5,197 monthly) for 10 years or P109,603 annually (P9,133.50 monthly) for five years. This bundle comes with a critical illness benefit of P250,000 up to age 70, daily hospital benefit of P1,000 up to age 60 and accidental death benefit P500,000 up to age 70. Permanent disability benefits can be availed of before the age of 60.

For a 30-year-old non-smoker who wants to increase the death benefit to P1 million, premiums will cost P62,630 annually for a 20-year plan, P125,260 annually for a 10-year plan and P219,205 for a five-year plan.

Depending on the amount of package availed of and the age at the time the client signed up, this product is designed to pay out a lump sum of up to P4 million per life in case of a critical illness and up to P3,000 daily hospital income benefit for hospital confinement. It also provides life insurance, accident insurance and waiver of premium should any disability occur before the age of 60.

It’s a “health solution that’s comprehensive, complete, and flexible,” Lopa said.

Meanwhile, because this is an investment-linked instrument, the client can also build up wealth and benefit from a potential upside in the financial markets as premiums are invested in balanced funds or a combination of fixed income and equities managed by professional fund managers.

“When health emergencies occur, people often find themselves worrying more about their finances instead of focusing on their recovery. With this product, they can be assured of having funds for health emergencies and critical illnesses without compromising their hard earned money or funds they’ve set aside for other purposes. It truly is a complete health and wealth solution,” Lopa said.

Sun Life Financial is a leading international financial services organization providing a diverse range of protection and wealth products and services to individuals and corporate customers. It operates in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China, Australia, Singapore, Vietnam, Malaysia, and Bermuda. As of end-2013, the group had total assets under management of $640 billion.