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  1. Join Date
    Nov 2005
    Posts
    45,927
    #11
    Hindi sustainable ang business na pre-need educational plan.

    It's not like insuring cars or fires.

    Out of thousands of policy holders, ilan lang naman ang maka-carnap or masunog ang bahay.

    So the insurer will have more than enough funds to pay.

    Pero educational plan, every semester, ang laki ng ilalabas na pera ang mga pre-need company.

    It's like a car or fire insurer na sabay sabay na-carnap o nasunog ang mga bahay ng policy holders nila. They wont have enough funds.

    Ung mga nakinabang sa mga educational plan, swerte sila kasi maaga sila nag join.

    Ung pambayad ng mga companies sa tuition ng mga nag eenrol dati came from the premiums of those who joined later.

    So... sadly... ung mga premiums ng mga late nag join nagamit na. So ung mga late joiner, aasa sila sa premiums ng mga mas late pa nag join.

    Thing is, mas konte na ang mga nag-jo-join sa mga educ. pre-need...

    so wala na mashado pumapasok na funds.

  2. Join Date
    Sep 2005
    Posts
    15,326
    #12
    ang nangyari yata dyan eh walang ceiling kung magkano ang tuition fee na babayaran nila.. so yung mga kumuha 10, 15 years ago.. eh mababa lang ang premium na binayaran.. kaso nung nag claim na sila.. eh ang taas na nang tuition fees, specially kung ateneo, la salle, etc.. kaya naubos ang pera nang CAP kasi ang nakinabang lang yung mga naunang nag join..

    kaya yung mga bagong pre need ngayon.. eh may specific amount na lang na ibabalik.. like 20T, 50T per sem..

    afaik, mas maganda pa rin kung life insurance na nag earn nang dividends ang kunin.. insured ka na.. and pagkatapos nang certain years.. you can withdraw your money.. mas mataas pa interest kesa sa local banks..

  3. Join Date
    Nov 2005
    Posts
    45,927
    #13
    From what i heard, naipit sa real estate ang funds ng CAP.

    Bumagsak Fil Estate, it brought down CAP's funds with it.

    Pero kahit in trouble na ang CAP, they still continued operating and still signed up new educ plan buyers.

  4. Join Date
    Oct 2002
    Posts
    1,842
    #14
    Quote Originally Posted by uls View Post
    From what i heard, naipit sa real estate ang funds ng CAP.

    Bumagsak Fil Estate, it brought down CAP's funds with it.

    Pero kahit in trouble na ang CAP, they still continued operating and still signed up new educ plan buyers.
    I think hinidi lang talaga kaya isustaine ang mabilis na pagtaas ng tuition.


    Plus ang Governing body pa yata ng educational plan is DTi not insurance commision

  5. Join Date
    Nov 2005
    Posts
    45,927
    #15
    Parang pyramid scheme lang ang pre-need.

    The pre-need companies have been short of funds for quite sometime na.

    Their salesreps are out there trying to sign up new plan holders.

    Hintay lang daw, nag iipon pa sila ng pambayad.

  6. Join Date
    Oct 2002
    Posts
    15,528
    #16
    Quote Originally Posted by MAXBUWAYA View Post
    I think hinidi lang talaga kaya isustaine ang mabilis na pagtaas ng tuition.


    Plus ang Governing body pa yata ng educational plan is DTi not insurance commision

    pre-need firms are under the supervision of SEC lang.

  7. Join Date
    Oct 2002
    Posts
    14,825
    #17
    Quote Originally Posted by uls View Post
    Hindi sustainable ang business na pre-need educational plan...
    There's a lot of misconception about your post (and shows that you're not familiar with the preneed or insurance business). Unless of course you have a BS Statistics Major in Actuarial Science degree and can prove on paper that it is not a sustainable business overall.

    First of all, the only non sustainable product line of preneed companies is the open ended educational plans, which CAP sold by the truckloads. While other preneed companies (like Philam, etc.) have halted selling it before (since the deregulation of the tuition fees for tertiary education) they were still marketing it out. This was determined via actuarial & financial computations - that is why currently all preneed companies are only offering a fixed-value educational plan.

    By the way, an open ended educational plans is where you pay a fixed amount of money and then the preneed company pays for the full (or partial depending on the plan type) amount of the tuition fee regardless of the amount. While in a fixed-value educational plan, you pay for a fixed amount and you'll received a fixed amount on a predetermined time (regardless if your son/daughter will go to college).

    Though even with the deregulation of tuition fees, CAP might have survived it (given their assets at least on paper). The problem was that they diverted their trust fund (which should be held under a trustee bank) to buy up a significant portion of Fil-Estate (which was way overpriced). Preneed companies are mandated to deposit around 60% of their premium collection as a trust fund (to prevent these kind of things), this is what CAP violated.

    As I know it, CAP has offered to pay a fixed amount (depending on what the amount that you have paid for) instead of the full tuition fee amount. Will research about this.
    Last edited by mazdamazda; January 30th, 2008 at 09:10 AM.

  8. Join Date
    Oct 2007
    Posts
    295
    #18
    Mr. Drey, CAP is under a rehabilitation plan. It would be best to be familiar with the plan. Have you filed your claims? Would you know if you are recognized as a claimant in the rehab plan? I think those are things you should check out.

    I'm not sure but it seems that there were announcements of releases of claims last year.

  9. Join Date
    Sep 2004
    Posts
    2,976
    #19
    CAP did stop selling open-ended educational plans after the CHED deregulated tuition increases, but the problem was, since they sold a lot of plans before the deregulation took place, they suffered a cash flow problem to meet their contractual obligations. Add to that the downturn of the real estate industry, fund mismanagement and their investments in MRT Corp. turning sour (MRT was losing money, and the government then wasn't inclined to raise fares).

    Back then, nobody foresaw that the cap on tuition increases would be lifted, the cost of education being a very sensitive political issue, and given the militant nature of several student groups. Which is why several other companies aside from CAP offered it. But then, siguro malakas lang talaga mag-lobby ang mga private school owners sa CHED. AFAIK, the tuition cap then was 10%, and given the economic climate at that time (banks were offering 10% interest on time deposits, T-Bills and T-Bonds were over 11 - 15%), so even an open-ended pre-need plan is SUSTAINABLE.

  10. Join Date
    Oct 2002
    Posts
    1,842
    #20
    Quote Originally Posted by mazdamazda View Post
    There's a lot of misconception about your post (and shows that you're not familiar with the preneed or insurance business). Unless of course you have a BS Statistics Major in Actuarial Science degree and can prove on paper that it is not a sustainable business overall.
    I think this is the problem , You have to have BS Statistics Major in Actuarial Science thingamajing to purchase a pre need plan.


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