Unsure of the Insurers; The Declining Pre-need Industry

[jpdm]

Tsk,tsk,...

Philippine Star

Pre-need sales tumble 21%

By Zinnia B. Dela Peña
Updated December 05, 2008 12:00 AM

Sales of the country’s pre-need companies fell 20.8 percent in the first 10 months of the year, mirroring the still weakened confidence of investors in the battered pre-need industry.Data from the Securities and Exchange Commission’s Non-Traditional Securities Department showed pre-need sales reached P12.71 billion from January to October this year, from P16.05 billion a year ago.The number of plans sold, however, rose 7.07 percent to 204,227 from 190,746.

Sales of pension plans, accounting for the bulk of total sales, dropped 35.48 percent to P6.12 billion from P9.48 billion as the number of plans sold declined 32 percent.


Education plans suffered the biggest drop in sales from P3.3 billion to P1.59 billion. A total of 9,290 units were sold, down 56.2 percent from the year earlier level of 21,698.


Sales of life plans, on the other hand grew 53.09 percent to P5 billion from P3.26 billion as the number of units sold increased 60.85 percent.
Initial collections, the first payment made by the planholder upon purchase of a plan depending on his or her mode of payment, amounted to P1.27 billion or 26 percent lower than the previous year’s P1.73 billion.
In October alone, pre-need sales hit P989.775 million, a decrease of 21 percent from sales in October 2007.


Pre-need plans are contracts which provide for the performance of future services or the payment of future monetary considerations at the time of actual need for which planholders pay in cash or installment at stated prices, with or without interest or insurance coverage and includes life, pension, education and interment.

[tidus1203]

Opinyon ko lang ito so no offense to others especially those involved in pre-need. Pero in most cases pre-need is so not worth it na rin these days. Dati ok sya, pero nowadays ang baba ng return halos talo pa ng inflation. Might as well ilagay mo na lang sa bond fund ang pan education ng anak mo kaysa ibiggay mo sa pre-need.

[uls]

gone are the days when u leave your money with someone and years later you have one huge pile of money

[tidus1203]

That is true uls. We are always the best guardian of our money. Everyone else just wants commissions and profit sharing.

[[archie]]

yep its true that if you know investments... better to hold on to your money na lang and invest if you have knowledge on where to invest it.

pre-need are bulit naman for those people that knows only bank savings as a investment vehicle kaya offer sila higher than what banks can offer.

my 2 cents.

[uls]

people trust the system too much

Walang ibang tao mas may malasakit sa iyong pera kundi ang iyong sarili

don't expect other people to have malasakit on your hard earned money

if they lose it, it doesnt hurt them

i don't even trust the people managing the SSS trust fund but i still give my monthly contribution

the SSS probably wouldnt exist anymore by the time i retire hehe

insurance companies, pre need companies, financial institutions, etc...

they come and go

there is no sure thing

[batangmahal]

Opinyon ko lang ito so no offense to others especially those involved in pre-need. Pero in most cases pre-need is so not worth it na rin these days. Dati ok sya, pero nowadays ang baba ng return halos talo pa ng inflation. Might as well ilagay mo na lang sa bond fund ang pan education ng anak mo kaysa ibiggay mo sa pre-need.

i totally agree on this one!

[tidus1203]

people trust the system too much

Walang ibang tao mas may malasakit sa iyong pera kundi ang iyong sarili

don't expect other people to have malasakit on your hard earned money

if they lose it, it doesnt hurt them

i don't even trust the people managing the SSS trust fund but i still give my monthly contribution

the SSS probably wouldnt exist anymore by the time i retire hehe

insurance companies, pre need companies, financial institutions, etc...

they come and go

there is no sure thing

SSS is such a pain, mandatory loss of money ang tawag ko dyan eh Factoring inflation later on when you get into your golden years sigurado talong talo ka sa contribution mo VS makukuha mo by then. Of all the people, governments are the most inept in managing money too much beareaucracies and too much red tape.

[gonzo]

Please enlighten me medyo mahina tayo sa financial analysis ehh, if I have a educ plan that will be in use in 10 years time pa (1st year college anak ko nun) what is my guarantee na my educ plan provider is still around after 10 years?.. its like giving a false sense of security.. remember CAP? is there a government agency that regulate this?.. then why Pacific plans?

I just withdraw the educ plan of my son sa Pacific plan.. it may not be the best decision since I loss some interest and benefit that I will get after 10 year.. wheww... but I lost trust sa educational plan ....especially eto nanaman ngayon may crises nanaman.. I may loss some money but I still get my principal than having false sense of security at the end of the day wala pala akong ma aasahan.. and who Im going to blame?...Gobyerno by not protecting me?.. wala namng ganun diba?... my brother in law may 3 children puro naka CAP naawa ako sa mga anak kasi di lahat naka pag aral... Please enlighten me if I am wrong in withdrawing my sons educ plan... thanks

Looks like I did the right decision withdrawing my educ plan last year

[4JGtootsie]

How is Manulife?

[Horsepower]

The safest thing to do these days is keep your money AWAY from institutions such as insurance/pre-need.

you can buy a land for example, then sell it later on when you'll be needing the money.

[4JGtootsie]

Ask ko lang about manulife kasi may plan ako sa kanila.

[uls]

only company insiders can know early if a company is in trouble

usually by the time the govt, the media, and the public knows about it, it's too late na

[Horsepower]

4JG: Media too silent about Manulife. Might be a sign of an impending trouble.

You might wanna consider taking your money back - while you still can.

[chua_riwap]

Sabi - sabi, 4 pa raw ang mga "naghihingalo" na. Isa rito yung Pryce. Sino naman yung 3?

Sa akin naman sa Cocolife.

[Horsepower]

nakakatawa nga yung Pryce, ang binibigay LPG! hahahaha

[chua_riwap]

^^ Eto na yun HP........

Cash nila nasa P100K + na lang?


http://www.philstar.com/Article.aspx...bCategoryId=68

16 Feb 2009

Pre-need planholders get LPG, memorial lots!


MANILA, Philippines - Cash-strapped pre-need firm Pryce Plans Inc. has opted to fulfill its obligation to plan holders by paying them in kind – specifically, through medicines, cooking gas and memorial lots.

Pryce Plans Inc. is hardly able to pay its obligations to plan holders in cash because its trust fund is illiquid, according to the Securities and Exchange Commission (SEC).

Based on data obtained from SEC, Pryce Plans Inc. has a trust deficiency of P56.17 million.

Reports submitted by Pryce Plans’ trustee banks to the SEC showed that the ailing pre-need company had reserves of only P113.23 million, short of the required 20 percent reserve of P168.4 million. These reserves comprised investments in the stock market and cash amounting to only P106,839 which is just 0.01 percent of the firm’s total trust fund.

As of end-December 2008, Pryce Plans had a total trust fund equity of P845 million, P591 million of which is for educational plans while P256 million is for pension plans.

The payment-in-kind scheme includes cooking gas from a sister company Pryce Gases Inc., medicine from another sister company and memorial lots.

Pryce Plans blamed the non-renewal by the SEC of its license to sell pre-need plans and the negative publicity involving the collapse of two of the industry’s major players – College Assurance Plans and Pacific Plans, for the deterioration in its cashflow generation.

As of end last year, Pryce Plans had assets of P1.28 billion as against total liabilities of P974.56 million. From P1.87 billion in 2004, its assets have been depleted by 31.7 percent.

Aside from Pryce Plans, three more pre-need firms are believed to be on the brink of collapse due to a funding shortfall.

The Federation of Pre-Need Plan Companies has asked the SEC to relax its capital and trust fund build-up requirements to ensure its survival amid a deepening global financial turmoil.

For this year, the SEC has licensed 24 pre-need companies, namely Ama Plans, Ayala Plans, Caritas Financial, Citiplans, Cocoplans, Danvil Plans, Destiny Financial Plans, Eternal Plans, First Country Plans, First Union Plans, Greyline Plans, and Himlayang Pilipino Plans, Loyola Plans Consolidated, Manulife, Mercantile, Paz Memorial Service, Permanent Plans, Philam Plans, Provident Plans International, Prudential Plans, St. Peter Life Plans, Sunlife Financial Plans, Transnational Plans, and Trusteeship Plans. -

[Galactus]

Ask ko lang about manulife kasi may plan ako sa kanila.

I have 2 policies with Manulife: Pension and Life.

As of now, I'm pretty confident. It's one of the biggest insurance companies in North America and while I haven't reviewed their financials, it seems they're not affected. From what I know, conservative kasi ang management nila and outlook.

I received a pro-forma letter signed by the company President recently, assuring their planholders of their stability. Kahit naman magkaroon ng problema (kung sakali) yung parent firm sa Canada, mukhang matatag naman yung local subsidiary nila. So, no worries for me at the moment.

[tidus1203]

only company insiders can know early if a company is in trouble

usually by the time the govt, the media, and the public knows about it, it's too late na

True! Let me reiterate what uls said previously. Ikaw lang may malasakit sa pera mo! IKAW LANG at WALA NG IBA! They are there to rake in commissions, sales, interest margins, and to hell with your money! Basta ako I never put money to pre-need and all that thingamajig, I invest my own money!

[4JGtootsie]

I have 2 policies with Manulife: Pension and Life.

As of now, I'm pretty confident. It's one of the biggest insurance companies in North America and while I haven't reviewed their financials, it seems they're not affected. From what I know, conservative kasi ang management nila and outlook.

I received a pro-forma letter signed by the company President recently, assuring their planholders of their stability. Kahit naman magkaroon ng problema (kung sakali) yung parent firm sa Canada, mukhang matatag naman yung local subsidiary nila. So, no worries for me at the moment.

Nakahinga na ako!
I know most investments have risks but being conservative makes a big difference. Im crossing my fingers.