Featured: Memorial plans: Preparing for the future today

This article from rappler.com will give you a general view of what is Memorial Plan (Life Plan) and why should every Filipinos needs it. 

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Memorial plans: Preparing for the future today

Often overlooked, memorial plans give tremendous benefits to those who get them early

Preparing for the future in personal finance usually involves the basic instruments: investment and insurance. But there is one instrument that is often overlooked but gives tremendous benefits to those who get it: life plan, more popularly known as memorial plan.

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A memorial plan is a product that enables the plan holder pre-pay future memorial services at a lower cost today. It typically includes the following in its package:

Memorial service in accredited mortuaries;
Assignment or transfer of the plan, and;
Insurance protection.

By itself, memorial servicing already gives huge benefits through the following: a ready casket for the deceased, Chapel or mortuary, pick-up of the body from house or hospital, embalming procedure, transfer permit processing, death certificate processing, and forwarding of such to the concerned City Hall. In short, families need not worry and exert effort in processing papers—the life plan company will do it all for them. A memorial plan also offers big cost savings: a casket bought at need would cost around P60,000 to P70,000 today. Under a full-service memorial plan, on the other hand, it can be had for at least P15,000. I myself bought one for P40,000 as I would imagine the prices of caskets and services by the time I go away to be more than the current value and thus, it makes sense to lock-on its price today.

There are cases, however, that the plan holder wants to transfer the benefits to another person. This is another useful feature of the life plan: it can be passed on to others in case of need. “Assignment” of the plan is passing to a deceased person’s benefit; while “transfer” is done from a plan holder to another living person. These, though, result in reduced benefits. Assignment typically results in a 50% – 75% reduction of benefit value. Transfer, on the other hand, will reduce the amount depending on the age of the new plan holder.

Apart from the services it offers, a memorial plan also add protection as it also provides built-in insurance coverage. And if a plan holder dies without completing the payment, the full memorial service benefit is given. Various memorial plans also give dividends or cash back features—adding up to the value of the existing plan or adding up to future cash flows of the plan holder. Just check these additional features with the plan’s agents.

But would a plan cost an arm and a leg? Hardly. Memorial plans have very flexible terms so they can be paid fully upfront, or on an annual, semi-annual, quarterly, or even monthly basis. Full cash payments can range from P15,000 to as much as P155,000, while monthly payments amount to as low as P825. All memorial plans, however, are payable for 5 years.

In a nutshell, getting a memorial plan is locking in on the price of the memorial services that one will need in the future. It’s like a hedge against the rising prices of memorial services and casket that you would need 20, 30 or even 40 years from now.

“Buying pre-need plans is a sure way to get memorial service benefits for a lower price – imagine just paying half the price for a full memorial service and having it all throughout your life,” said Alice Garcia, Group Business Manager for one popular plan provider that has been in the business for the past 30 years.

“I’ve seen relatives of clients and policy holders having no trouble at all in providing for the memorial services, because their deceased loved one has prepared and bought on a life plan very early,” she added. – Rappler.com

Rienzie P. Biolena is registered financial planner of RFP Philippines, a professional group of financial planners in the country. To learn more about RFP, you may email info@rfp.ph.

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