Life Insurance: One of the Best Tool in Estate Planning (by Atty. Angelo Cabrera)

There are only two things that are certain in life – death, and taxes.

In this video, Atty. Angelo Cabrera pointed out great topics that are prevalent in today’s market.

Let’s get down with some basics and understand what Estate Taxes and Estate Planning are.

What is Estate Tax?

Upon death of an individual, all his properties should be transferred to the heirs (sa mga tagapagmana). That will only possible after payment of a transfer tax called estate taxes.

Estate taxes are unavoidable, thus, it’s necessary to plan for it.

This leads us to the second term.

What is Estate Planning?

Estate Planning is the act of proactively seeing (and foreseeing) the requirements and the needs in the transfer of assets should a property owner dies. Through estate planning we will be able to prepare what is bound to happen anyway (though timing is still uncertain) without having our loved ones worry about where to get the money to pay off estate taxes.

Disadvantage of Donation and Incorporation as way of avoiding estate taxes

In this video, Atty. Cabrera raised the usual practices of many in avoiding estate taxes and pointed out that Life Insurance is one of the best way to plan for our estate. In particular, he mentioned the disadvantages of the following for the sake of trying to avoid estate taxes.

1) Donating properties to the heirs while we are alive.

This premature transfer may destroy the character of our children because of instead of relying on their own God-given abilities to produce their own wealth, they no longer have to since they got the wealth from us.

2) Incorporation

This will push the children in a co-ownership regime that might lead them to a conflict situation, or inequitable situation where one ends up domineering and controlling while the other children/heirs suffer in silence.

As a result, many of the properties that are co-owned are left idle or uproductive.

Life Insurance and Estate Taxes

He also advised to load up as much life insurance possible until we’re still insurable. Insurability has the following considerations:

1) Age
2) Health
3) Financial Capacity

Bumabagsak ang market. Dapat ko na po ba withdrawhin ang investments ko?

Nagwoworry po ako.

Palagi po akong nagmomonitor ng investments ko sa equity funds. Napansin ko po na unti unting bumababa ung values ng investment ko.

Napag-iisp tuloy ako, dapat bang withdrawhin ko na ang pera at hintayin na maging ok na nag market? Papasok nlng ulit ako kapag pataas ng ulit ang mga investments.

Ano po ang maipapayo nyo?

Maraming salamat po.

Single Pay VUL or Mutual Fund

Sir Nick, ano po maipapayo nu sa katulad ko..

my insurance na po ako dto sa singapore linked to investment din po since 2007 til 2022 aside from the insurance provided by our co.

Gusto ko po sanang pure investment lang kya lng nabasa ko sa inyo na mas maganda ang single pay VUL kaysa sa MF…

52 yrs old na po kc ako kya ang target ko ay para sa retirement ko po….yun po kayang cost averaging or compounding interest applicable pa ba sa akin yan e gusto ko po kac at d age of 60 tigil na po ako ng work.

Pwede po bang idiscuss nu ung pros and cons or comparison ng MF ng SPVUL…at saka mga fees na rin po….maraming salamat po.

The Value of Investing in Life Insurance

Here’s an interview with Registered Financial Planner, Marvin Germo, at UNTV discussing the value of Life Insurance.

Discussion Summary

Marvin Germo really made this conversation with life insurance very interesting. One, because he talked about it in a very lively manner, and because he made everything sound so simple.

Here’s a recap of the key points discussed in this video.

Ano nga ba ang Life Insurance?

Lahat ng bagay ay may risk – risk na masiraan ng sasakyan, masunugan ng bahay, na tayo ay magkasakit, or mamatay ng maaga ang isang breadwinner ng pamilya.

Kailangan natin ng Life Insurance para protektahan ang mga taong umaasa sa isang breadwinner sa risk na mawala ng maaga ang tao kung saan sila nakadepende.

What will encourage people to buy life insurance?

Maraming misconception tungkol sa life insurance. Maraming nagsasabi na “Hindi pa naman ako mamamatay”, anjan din ang dahilang “Ibang tao naman ang makikinabang jan”.

According to Registered Financial Planner Marvin Germo, ang pagkuha ng life insurance ay pagiging responsable – paraan ng paghahanda na dahil hindi natin alam ang mangyayari sa hinaharap, we are ensuring that our family is well taken care of.

Ang life insurance ay tumatayong safety net para siguraduhing may aasahan ang ating pamilya mawala man ng maaga ang breadwinner ng pamilya.

Pwede bang mama-claim sa Life Insurance kahit buhay pa?

Ang mga benepisyo ng life insurance ngayon ay hindi lamang kapag namatay tayo, kundi may mga benepisyo na pwede natin makuha kahit tayo ay buhay pa.

Meron dalawang problema na ina-address ang life insurance:

– We die too soon
– We live too long

Maaari natin gamitin ang Life Insurance upang mapaghandaan ang ating Retirement or Education ng ating mga anak.

Get Life Insurance while you are still young

Mas mura ang life insurance habang mas bata pa tayo.

Bukod doon, ang life insurance ay isa sa mga bagay na dapat natin kuhanin habang di pa natin ito kailangan, dahil kapag kailangan na natin ito, maaaring di na tayo makakakuha pa.

Saan magandang iinvest yung 25k ko per month?

Kabayan magand araw sayo, need lng ako ng advise, i have a plan to start to invest medyo ung idea ko eh di pa ganun kalawak pero inaaral ko sya madalas at unti unti ko ng nakukuha, ngayon plan ko maginvest this is my first time actually.

Now my goal is to have a house&lot, now in 5 years i can get 1.5M for 25k a month, then ung 5k gusto ko ilagay sa longterm goal na balance lng ung risk, and the the rest 20k saan ko sya pde ilagay monthly? na sa tingin mo sa pinakamagandang iinvest ung 20k???

ngayon ung 5years ay initial lng kung kaya ko pa magsurvive eh itutuloy ko ito sa 10years for more income or to become a millionaire, sa ngayon ndi ko pa madesisyunan kung saan ko maganda ilagay yung 20k.

another question pala what if, on my 4th year eh nangaylangan ako ng pera at nagamit ko na ung emergency money ko na nasa savings, ano ang mga maaring mangyari sa investment ko if matigil ako sa paghulog ng one year?

sana ay matulungan mo ako na malinawan maraming salamat kabayan isa pala akong ofw, akma ba sakin ang investment habang nasa ibang bansa ako?


Have Answer to this Question? Post it Below!

Why Do People Get Tricked In Joining Investment Scams?

It’s all over the news, and it’s really sad to see people fall and become victims of empty promises aimed to rob them of their hard earned money.

“They deserve it, those GREEDY people!”

That’s what I often read in Facebook groups and forums. Well, really? Are they really just Greedy?

Let’s explore the different types of people that become victims of these types of transactions.

Victims of an Investment Scam

1. People who wish to be taken out of poverty as soon as they can.

I remembered a story from one of my clients regarding the scandal of Aman Futures that happened during 2012.

During the height of one of the most controversial investment scam in the history of the Philippines, farmers started to sell their farms to invest in Aman futures – expecting hefty profits from the company.

The hype increased as members parade their newly bought SUVs in the provincial roads.

What’s sad in this story?

Those farmers sold everything they had for a hope that it will be “the one investment” that will lift them up from poverty.

We already know how this tragedy ended up.

2. People running for the quick buck

Few years ago, I started exploring the world of Forex trading. The promise and potential was so great that I thought I could buy a 3 Million Peso condo unit in a year of trading with an investment of P5,000.00.

I didn’t expect that I would burn my P5,000 in just 1 week of trading. Burned as in nawala lahat!

Well, I thought that I can get back the lost money by investing another P5,000.00. After a week, I lost it again.

Just to be clear, Forex trading is not a scam. But the behaviour on how I dealt with the investment is somehow the same with people who are going after the fast and easy money.

As the famous investment mantra says “The higher the potential returns, the higher the risk.”

Investment scams offer a tremendous amount of return in a short time frame. No doubt that the risk is equally high as well.

3. People with good intention to do business but fell in the wrong organization.

There are some who are just there in good faith, trying to make an honest income, but for an unfortunate reason, was involved in a questionable organization.

The best way to get away from this is to do our due diligence. It’s best to check out the collection of articles  below to help you detect whether the company you’re trying to deal with is legit or not.

It won’t hurt to spend time checking out which company you’ll involve yourself in before putting that much effort in trying to build your business.

4. People who wish to ride the scam parade and benefit from it

These people already knew clearly what they are diving into, they knew that one way or another, they are involving themselves in an investment scam. They proceed anyway.

Well, in fact, these people try to ride the scam parade with the aim to get out with as much they can.

How can we avoid being a victim?

In most cases, being aware of how scams operate would help us get away from the headache of being a victim.

In some instances, even though some people are aware, they’ll dig in anyway. That’s a risk they have voluntarily taken.

How to spot a scam? You may refer to the following articles.

1. How to spot investment scams by Rappler.com
2. How to Avoid Scams by Edmund Lao
3. How you can detect an investment scam by Abs-CbnNews.com