What is the difference between a PRE-NEED Company and an INSURANCE Company
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What is the difference between a PRE-NEED Company and an INSURANCE Company

This is a discussion on What is the difference between a PRE-NEED Company and an INSURANCE Company within the Business, Finance & Economics Discussions forums, part of the Commerce category;

  1. #1
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    Default Insurance 101


    Hi guys... Somebody PMed me this question. Since, I am already in the Life Insurance Industry, I might as well share the answer to this question as it is useful to other people...

    A Pre-Need Company...
    ... offers 3 main products: (1) Educational Plan; (2) Pension Plan and (3) Life Plan or Memorial Plan.
    ... If an agent approaches you and he says that he belongs to "(Name of Company) PLAN", then he's connected with a PRE-NEED Company. Basta naay PLAN ang name sa company, PRE-NEED na. (i.e. Philam Plans is a pre-need subsidiary of PhilamLife, Manulife Financial Plans is a Pre-Need company of Manulife, etc.)
    ... Registered with SEC. No regulating government body (unlike PDIC for banks, and Insurance Commission for Insurance Companies).
    ... Educational Plans are usually classified into two: (1) Traditional Eductaion Plans - the ones in troule today and (2) Fixed Valued Educational Plans.
    ... Traditional Educational Plans => Upon maturity, a pre-need firm pays the tuition of a beneficiary regardless of amount (checks are paid to the school)
    ... Fix Valued Educational Plans => Upon maturity, a pre-need firm pays the beneficiary an agreed amount (checks are paid to the plan holder, not to the school)
    ... For those who have questions regarding CAP, please check out this link, [4c-math94] Pre-Need Companies
    ... For a list of all LICENSED DEALERS OF PRE-NEED PLANS as of Feb 21, 2007, check out this link, http://www.sec.gov.ph/pre-need/2007%...ed%20Plans.pdf
    ... Gov't to regulate pre-need companies article, Government to regulate pre-need companies : Philippines : Gov.Ph : News

    An INSURANCE Company on the other hand...
    ... Regulated by the Insurance Commission. (Mura ni cya ug PDIC for the insurance companies. So, if musalig mo bank kay salig mo naay PDIC, same with Insurance Companies. A regulating body makes sure that nobody is left hanging in case an insurance company decides to discontinue their services in the country.)
    ... May sell life or non-life insurance
    ... Life Insurance (Traditional Life Insurance, Group Insurance, Variable-Unit Linked (VUL) Insurance, health insurance, accident insurance, etc.)
    ... Non-life insurance (Car insurance, Fire Insurance, Theft Insurance, etc.)

    Since I am more on the Life Insurance field, here are some descriptions of the products that are commonly available in the industry...
    ... Traditional Life Insurance = from it's name, the traditional life insurance that we now. Has some Cash Savings feature, and if ever something happens to the insured, the Face Amount/Insured amount will be received by the beneficiaries. But there are some modifications available to these kinds of products, such as college/education fund feature, pension type (more known as Anticipated Payment features, other plans have a short-paying period like 5, 10, 15 years. At least you don't have to worry anymore of having to pay for your life-insurance FOR LIFE. There are also modifications that can give you health insurance.)
    ... VUL = a variable unit linked insurance wherein, it is part insurance and part investment. As far as I know, majority of the key players in the industry are offering this kind of products now. If you want to know more, ask your questions lang kay murag taas ang explanation ani.
    ... Endowment products = this refers to limited pay insurance and after a certain number of years, you get the maturity value. (e.g. 5years to pay, then after 10 years from full payment, you get the maturity value). The one thing you have to remember about these kinds of insurance products is that when it does mature, the insured is no longer insured.
    ... Term Insurance = this refers to a limited time that the insured is covered, usually it's only good for a year. If nothing happens to the insured within the time he is covered, then he get's nothing. He only gets the assurance that IF EVER something DOES happen to him, he has PROTECTION. If nothing happens after 1 year, and he still wants to have PROTECTION, then he has to pay for another term.
    ... As posted in the other posts regarding "What to do when you hear your insurance company is closing down", there's already a link there on the statistics of the different insurance companies as of 2007.

    Hope you are all enlightened with this little sharing... (Little ra ba ni )
    Last edited by honey2723; 10-26-2008 at 11:08 PM. Reason: Change title

  2. #2
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    up for today para mabasahan ni nga info sa uban...

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    ... now i finally understand... (and daghan pakong makat-onan)... keep it coming...

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    Default The Story of your Life Insurance Policy

    Hello guys! As a Finance Educator, let me tell you how your typical life insurance works thru a biography. The biography of your Life Insurance Policy. Here it goes...

    ================================================== ===============

    I am your Life Insurance Policy

    You and I have similar purposes in this world.

    It it your job to provide food, clothing, shelter, schooling, medicine
    and other things for your loved ones. You do this while I lie in your
    safe deposit box.

    I have faith and trust in you. Out of your earnings will come the cost
    of my upkeep. At times, I may appear insignificant to you - but someday
    (and who knows when) you and I will change places.

    When you are laid to rest, I will come alive and do your job. I may provide
    food, clothing, shelter, schooling, medicine and other things your family will
    continue to need - just as you are doing now. When your work and labor
    are done, mine will begin. Through me, your hands can carry on.

    Whenever you feel the price you're paying for my upkeep is burdensome,
    remember that I can do more for you and your family than you will ever do
    for me. If you do your part, I will do mine.

    Sincerely yours,

    Your Life Insurance Policy

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    Default ...

    img ang show heheh...

  6. #6
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    aw mao d i na ang meaning? i thought same ra na cla..

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    up ko ani...

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    i hope you guys are reading this kay para ma-enlighten mo gamay sa mga nahitabo karon sa pre-need companies...

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    thank you so much for the info..

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    Hello honey273, very good insights. I hope people will now differentiate between this two companies because every time I go out to the filed permi jud ni i compare ang Pre-Need to Insurance companies were in fact they are totally different. Hehehe! Daghan pa jud trabahoon ang IMG para ma educate ang people about Financial Industries.

    Who ever interested to help and join with our crusade by changing people's live and spreading Financial Literacy programs just pm me.
    Last edited by lorenzoleo; 06-22-2010 at 10:22 PM.

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