Long Form Emmanuel Emmanuel Pt2
Emmanuel: The VUL’S are being sold as investment plans, but they’re actually not investment plans.
Philippe: That’s what we get from financial advisor “sales agent”.
Emmanuel: Oo, it’s first and foremost an insurance product, but with a savings component. So that’s why it’s important na ano na to partner with a financial advisor na nakikita mo who is here for the long term, who will not be just there for the sale, but will be there for the service and hopefully even during the claim.
So, my name is Emman Paras. I’m a financial services expert uh focusing on business owners and uh corporations. I’ve been helping uh executives and business owners prepare for their financial planning not only for their business but also for their families as well.
Philippe: I need your thoughts about this because I’m having mixed emotions and mixed opinions about this. The most that I would see in GCash initially is accident insurance.So yan, cash flow income loss as low as 120. What are your thoughts of these types of insurance? Parang 60 pesos per month? Are these legit insuranceances?
Emmanuel: Uh for me those are.
Philippe: Let’s talk about your business. So you focus on helping entrepreneurs. Is this more on advising know how to manage your finances, where to put their investments? Or do business owners come to you and be like, “Oh, I’m having trouble in managing what I need to manage in terms of finances. It’s all over the place. ” Is that what you cater to?
Emmanuel: Yeah. Basically, focus on risk management for business owners. Kasi pag bussiness owner, bussiness owner din manan tayo diba? So parang gung-ho tayo parang go go go ganon no. And sometimes masyado kang focus on growth and everything hindi mo na realize yung risk.
Yung ano pag financial planning or going for financial freedom or growth in your uh business and family. I liken it to ano a building. Like for example, bro, if you are ito, itong ano north tower, if this building na ginawa na hindi sila naghukay ng foundation and right now we’re at the 16th floor. 17 floors lang ‘to diba?
Emmanuel: So 16th floor tayo. If you knew that this building is hindi siya hinukay before siya e-build, it’s like literally on the ground siya tinayo. Would you want to have office here?
Philippe: Of course not.
Emmanuel: Of course not. Kasi parang konting ano lang. Baka yung MRT konting ano lang, ano na to masira, mahuhulog na siya. So a lot of times ganun yung perspective natin biling Pilipino or as a business owner. We’re just focused on the goals, the the building pero hindi natin naiisip na kailangan for you to be able to have a high building the foundation should be deep also.
So the foundation, yung hukay is directly proportional to the height of the building that you want to create to build. So a lot of times masyado tayong focus on the height of the building, hindi atyo naghuhukay. That’s where risk management comes into play.
Philippe: That is literally deep. Literally deep. That’s good advice. I never thought of it that way.
Emmanuel: To grow for example kung kasi right now you have so many clients na. You’re really headed for a lot of growth with AI and everything. So most likely yung building mo mataas but how is the foundation?
Philippe: That got me thinking, go on.
Emmanuel: So kailangan bro, huhukayin mo yung ano yung risk management mo. So growth and risk management are actually hand in hand. Hindi pwedeng growth muna tsaka ko iisipin yung risk management mo. And when you, and sa business side of course I already said na kung ano yung mga risk in general for the average Filipino and for average human being.
Pero on the business side may additional pa. Like for example the risk of the owner getting sick or passing away or if for example may key business partner ka. What if siya naman yung magkaroon ng ano. What if your employees yung turn over is masyadong mabilis. So what can you do? So all of these things meron ding solution for ano for financial services. So dapat meron tayong tinatawag na keyman insurance.
Emmanuel: Keyman insurance is ensuring the key people in your organization. Actually sa mga business owners they, merong hack that you can get your own insurance policy without you shelling out of your own pocket. You let the company pay your premium. Hindi galing sa bulsa mo. So that’s one ano one hack for business owners.
Philippe: Give us more hacks.
Emmanuel: That’s called keyman insurance bro.
Philippe: So keyman insurance. Give us more hacks. I’m listening. Okay.
Emmanuel: Yung buy-sell agreement for example ano bro. For example bro ano you have a business na 100 million yung ano yung worth. And then you have five partners. So and then equal stake sila. So basically tig 20 million na ano. If one of them passes away what will happen is that the nearest kin, yung asawa or yung anak would step into the board.
And most of the time yung person na to yung nag take-over hindi siya part ng bussiness talaga. Na parang nandun lang sya to get dividends. But without really adding any value. So the better solution would be meron kang insurance for each of these partners tig 20 million so that if ever one passes away or is taken out of the picture the 20 million insurance will be used to buy out the family of the deceased partner.
Emmanuel: It’s a win-win situation kasi the family needs the money. And then the the original owners, they keep the control. That’s called buy-sell agreement.
Philippe: Buy-sell. Oh, that’s. Give us more.
Emmanuel: Give us more. Hey. No.
Philippe: we love that hacks hard ang ganda.
Emmanuel: Of course. For the employee benefits, there’s group life insurance. And there’s HMO. So those are also insurance plans. And actually meron din akong isang advocacy is called PERA. PERA is Personal Equity Retirement Account. So with PERA it’s a law. It’s a law.
Philippe: Okay.
Emmanuel: It was enacted 2016 pero ngayon pa lang nag ga-gather ng momentum. You know 401k in the US?
Philippe: Of course.
Emmanuel: So 401k in the US is the basis for the PERA. So with PERA you get tax benefits for the employees, wala siyang income tax wala siyang estate tax, withholding tax and then for the employer may tax benefits din for the employer when they implement PERA sa kanilang company. So it’s a win-win situation for both the employees and the employer.
So the maximum contribution currently 200,000 per year. So pag nag lagay ka ng 200,000 per year sa PERA then wala siyang tax. Unlike for example if you get a 200,000 as salary, minus ano na agad yun, tax agad. 140,000 nalang kasi may 30% tax ka. Pero kung ilagay mo sa PERA yung 200,000 buo siyang na iinvest for your retirement. So that’s called PERA.
Philippe: And let’s say 200,000.
Emmanuel: Yeah.
Philippe: You need to fill 200,000 in one year or pwede ba?
Emmanuel: No, it’s the that’s the maximum amount, but you can like start with 1,000 per month, 2,000 per month ganon siya.
Philippe: Is there any dividends when putting it in that program?
Emmanuel: Depende if you invest in stocks that are giving dividends. Kasi may mga dividend paying stocks diba sa market?
Philippe: is this program para similar to like the SSS peso pig MP2 or is it different?
Emmanuel: So SSS is mandatory retirement. So pag empleyado ka kailangan mo’ng gumawa talaga ng SSS. The PERA is voluntary retirement. So it’s not mandatory. you don’t need to to save up on it pero you can volunteer to be able to set up your own
PERA account so that you can have more capacity to be able to plan for your retirement. Kasi bro yung SSS 5,000 per month lang yung nakukuha on an average. For example yung dad is 88 years old na. Mag 88 na, living too long, but living not too long but living
Philippe: Beyond average.
Emmanuel: Beyond the average. 5,000 lang bro yung nakuha niya sa SSS. So imagine kung ganon yung nakuha and base sa standard of living ngayon. 5,000 is just transportation, medicine ganon lang yon eh. So dapat meron kang sarili mong vehicle. So yan you can do insurance, endowments and then meron ding PERA wherein may tax shield ka for your retirement funding.
Philippe: So itong tax shield okay this program PERA. So 200,000 with inflation and let’s say after one decade. Yung 200,000 mo it’s still 200,000 right?
Emmanuel: You have the option to invested in various vehicles. So yung parang pinaka conservative or not risk-free pero pinaka conservative would be the money market.
So money market is on an average 6% per annum which is good kasi time deposit is 1% lang, diba? So money market 6%. Or you can also go blue chip stocks, dividend paying stocks, bonds.
Philippe: In this program do you pick where it goes or do we have to hire someone?
Emmanuel: You you can pick where it goes or you can choose like a default option kung saan mo gustong malagay yung ano yung fund mo.
Philippe: I see. And if we want to avail or let’s say.
Emmanuel: let’s talk after.
Philippe: Yun pala yun. Now I see. Ang ganda ng segway. Ang galing.
Emmanuel: All of these things let’s talk after even the other things.
Philippe: Galing.
Emmanuel: So, nasan na ba ako? Ayun, diba yung for the insurance portion yung keyman, tapos yung buy-sell agreement and then the employee benefits. And actually pwede mo ding gamitin yung insurance as a parang golden handcuff eh. Like for example si
Philippe: Mclain.
Emmanuel: Mclain. Mclain how would you want to have your own insurance plan na hindi ikaw yung gumastos, gusto mo ba yun? Oh, masarap pakinggan. So since for example Mclain is a key employee in your organization. For example I’m your employer what I’ll do is that Mclain let’s make a deal.
So I’ll buy you a plan during the first 10 years of the plan the company is the beneficiary. The company is the owner and the company is also the beneficiary and then mag stay ka dito ng 10 years fully paid na yung plan mo. I will now transfer to you the the plan. Gusto mo ba yon? Ayun. So ganun, ganun bro. That’s a retention benefit or golden handcuff for Mclain para mag stay sya ng ano ng 10 years sa APX.
Philippe: This retirement program is this I mean is this in certain government agencies or is this in a bank or how does this work?
Emmanuel: Yung PERA bro?
Philippe: Yung retirement program.
Emmanuel: Yung retirement program. So for PERA you can invest it in various assets.
Philippe: I mean who made the program is this?
Emmanuel: It’s the government who mandate who enacted the law for PERA. Yeah. And there are PERA administrators right now in the country apat pa lang. So BPI, BDO, ATRAM, and Dragonfi. So I’m part of the dragonfi team.
Philippe: Bakit maximum 200,000 lang, ‘di ba pwedeng above?
Emmanuel: Kasi bro syempre tax evasion na yon pag 1 million diba?
Philippe: Sabagay, sabagay.
Emmanuel: Pero actually may move in the next months gagawin siyang 300,000 and then for OFWs 600,000 it’s always double. So ngayon the maximum for Philippines based employees is 200,000 for OFWs 400K. Actually that’s one hack din for OFWs yung PERA. And then in the coming months they will increase it to 300k for the Philippines based employee force people and then 600,000 for OFWs.
Philippe: I’m looking forward to that kasi 200,000 now anong mabibili mo dyan.
Emmanuel: Oo correct, diba? Tsaka ano may tax na agad yon pero if you implement it on a company basis may tax yon. Hindi ka na ma ta-taxan e allocate. In a way para syang allowance, yung mga gas allowance meal allowance.
Kasi buong, kunwari 2,000, diba? Yung buong 2,000 na yung makukuha mo. Hindi sya ta-taxan yung 2,000. so it works that way pero it’s a separate account hindi siya allowance.
Philippe: Yeah, hindi siya ano. That’s very ano. That’s actually good because as business owners especially here in the Philippines.
Emmanuel: Yeah actually the business owners part of your salary pwede mong ilagay dun. Pwede mong e maxout. Pwede mong e maxout yung 200,000.
Philippe: Kasi we have, we don’t have, unlike, by, pero dapat,I’m not, I’m okay na yung the government is pro employees but I’m not okay is when these employees gumagawa sila ng kalokohan and bina-back up ng government. We’re the ones providing jobs we’re the ones providing paying higher taxes.
Emmanuel: Yes, yes.
Philippe: Corporate tax, right? But we don’t have any we don’t have enough benefits at all. So this is a good start. So mag-usap tayo mamaya. It’s so great. Are there any other programs similar to this? Kasi we we max out at 200. Is there any other program similar?
Emmanuel: Yung ano yung MP2 for example yung Pag-IBIG.
Philippe: Yeah.
Emmanuel: Oo, I think ngayon 100,000 yung maximum niya. So.
Philippe: Really?
Emmanuel: Yeah. So pwede ka don. Pwede ka mag ano like of course you have SSS and then you have Pag-IBIG kasi nga wala din tax yun. Yung difference lang non yung Pag-IBIG hindi sya asset. It’s like you’re parang lending money to Pag-IBIG tapos yung Pag-IBIG pinapa-loan niya sa ibang tao.
Philippe: Yeah. Usually ganon naman talaga.
Emmanuel: Yung pera is actually an asset kasi you’re buying yun nga money market, securities, bonds, stocks ganon. So it’s really an asset and it’s portable. So kahit na mag move ka to another company is still it will still be in your account.
Yung magiging difference lang is that for example if APX implemented it on a corporate program pre-tax siya, pre-tax so walang tax. Pag nag move ka sa ibang company na walang program in their company post tax na siya.
Philippe: Post tax, okay.
Emmanuel: Oo, so for the companies who are adapting to PERA early. It can be a differentiator and a additional value proposition for employees to stay.
Philippe: Wow. That’s amazing. It’s really good that we have this and if you haven’t mentioned PERA I mean we’re not even aware of this. I’m not aware of this PERA although I’m aware of the other ones.
Emmanuel: Yung 401k yung SSS. Yun yung ano is part of our advocacy as well to be able to spread awareness about PERA. Kasi bro as I said 3.6 six months worth of their salary lang yung ano meron yung average Filipino when they retire. Tapos yung makukuha nila sa SSS is 5,000 lang every month.
So, that’s why it necessitates na meron tayong ano additional personal retirement vehicle. So, it’s through PERA through Pag-IBIG or through again insurance. I suggest pag sa retirement mo you go for the as much as possible you go for the guaranteed plans.
Emmanuel: Kasi yung VULs, yun yung misconception nga eh na parang the VULs are being sold as investment plans but they’re actually not investment plans. They are insurance plans with the savings component but not investment.
Philippe: Thank you for mentioning that.
Emmanuel: Yeah.
Philippe: That’s what we get from financial advisors.
Emmanuel: Oo.
Philippe: Sales agents.
Emmanuel: Yeah. Yeah. They’re not, this is not an investment plan. It’s a it’s first and foremost an insurance product but with a savings component.
Philippe: That’s it.
Emmanuel: Yeah. So that’s why it’s important na ano to partner with a financial advisor na nakikita mo who is here for the long term. Kumbaga hindi ka lang who will not be just there for the sale but will be there for the service and hopefully even during the claim will be there as well.
Philippe: Okay, that’s that’s another issue, the claiming part kasi yun nga nawala na yung pilicy holder. When it comes to.
Emmanuel: Yung agent nawala.
Philippe: Sorry, yung ma cla-claim sana wala na yung agent. So they’re just there for the temporarily and then I think a lot of the policy holders are having or sorry yung nag cla-claim for the policy holder that has passed away. Nahirapan sila. So I think that’s one big issue why even most Filipinos don’t want to ano consider insurance. I have one specific it’s a small topic lang. I just want your thoughts about it and opinion.
Emmanuel: Yes bro.
Philippe: You know in GCash where they have these. Let me let me open up GCash and then let me show you. Kasi they have G-insure.
Emmanuel: Yes. Yes.
Philippe: I need your thoughts about this because I’m having mixed emotions and mixed opinions about this.
Emmanuel: Okay.
Philippe: The most that I would see in GCash initially is SingLife.
Emmanuel: Okay. Yeah.
Philippe: So meron silang accident insurance.
Emmanuel: Okay.
Philippe: So yan, cash for income loss as low as 120 per. ‘Di ko alam kung per day to or per month? Pero more or less range 500 to 600 per month. Ah ito! Ito nga. Have money to support your family in case of disability or death due to accidents. 84 pesos per month. What are your thoughts of these types of insurance?
Itong yung mga maliliit lang na nakikita natin. Ito SunLife personal accident armor. It’s 60 pesos. Parang 60 pesos per month. Are these legit insuranceances? Are these, I mean legit sila nandiyan pero?
Emmanuel: Yeah. Yeah, they’re there.
Philippe: Is it okay? Let’s say if someone can afford a high premium, can they get these? Are they okay?
Emmanuel: For me, those are good as supplemental coverages. Kasi the like for example yung feature niya is just for accidents. But not everyone dies through accident, diba?
Philippe: Yeah.
Emmanuel: Most people die through sickness, critical illness or viral or something. So yung accident yung possibility of dying in an accident is not like high, diba? So makakakuha ka lang ng benefits diyan if you pass away through accident or if you get into an accident. So important pa rin. Tapos yung mga yan of course they’re cheap.
Philippe: Yeah.
Emmanuel: But if if nothing happens to you, it’s sunk coast na. Sunk cost ibig sabihin di mo na ma rerecover yung binayad mo. Just like ano sa car insurance ganon din yun. So you pay for car insurance. If something happens to your car, then you can claim.
Pero if nothing happens to your car, then hindi mo na ma rerecover yung 15 or 20,000 that you paid for your car insurance. So same yan yung mga ganyan.
Philippe: It doesn’t mean affordable, high coverage or.
Emmanuel: Yeah. Oo. Parang it’s good to supplement.
Philippe: Supplement lang?
Emmanuel: Oo pero I suggest that you still get like a permanent policy that means ano lifetime coverage up to age 100. And then meron ding ano most of the plans na ganun meron ding deadline kung hanggang kailan ka magbabayad like 10 years, 20 years ganun.
Para hindi ka every year magbabayad, kasi yan every year magbabayad ka. Kung makalimutan mong magbayad and then something happens to you wala ka ng ma cla-claim kasi tapos na yung coverage.
Philippe: Ito nga monthly.
Emmanuel: Ah yun, yun.
Philippe: Oo ngaeh. I think you have the option to pay one year but parang monthly.
Emmanuel: As much as possible you try to pay annual kasi yung monthly normally may additional charge pag mas frequent yung payment. Yes. Model factor.
Philippe: Thank you for the tip.
Emmanuel: Yes. Subscription lang. Alam mo diba, Netflix?
Philippe: True, true. It’s true. It’s true.
Emmanuel: Ganun din Disney, diba? Mas mura pag ano pag annual kaysa sa monthly subscription.
Philippe: Parang 2 months off pa nga eh.
Emmanuel: Yes, yes. Same.
Philippe: Thank you for answering that because I have a lot of people asking me about. Paano to? Pwede ba to? Kasi.
Emmanuel: Oo, okay naman. Pero yun nga hindi ka dapat umasa lang diyan. Like a lot of people when when I talk to them, Ah meron na ako sa Gcash. Pero yun nga.
Philippe: Oo nga eh.
Emmanuel: Those are just like supplemental and ano lang siya they call it term insurance.
Term insurance is may term may period. So 1 year,
Philippe: 1 year.
Emmanuel: 6 months or whatever. So it’s cheap pero wala siyang any balik. Wala siyang any savings component.
Philippe: So it’s just like pure protection lang?
Emmanuel: Yeah, pure protection lang. So it’s a good supplement but should not be your primary source of insurance. Kasi isipin mo bro 80 years old ka na kung wala kang any other insurance nasa Gcash ka. Malabo na mata mo nag aano ka pa, subscribe ka pa diba bro? Parang ‘di magandang tingnan ‘diba bro? ;
Philippe: Parang mali yung ano niya ah. Mali yung pinindot.
Emmanuel: Tapos isipin mo magkano nang binayad mo. Kunwari, you started at age 30 tapos 80 years old. That’s 50 years worth of premiums that you paid.
Philippe: Oo nga no.
Emmanuel: It looks cheap pero for the long run, diba? 50 years of 6,000 is still magkano mas mahal pa din yun diba?
Philippe: Good point. Bro, thank you for coming over.
Emmanuel: Of course.
Philippe: I know you are a busy guy and I really appreciate you coming all the way from Makati ka right?
Emmanuel: Yes.
Philippe: Okay. So, siguro one last thing that I want you to share with our viewers because if any entrepreneurs or business owners want to contact you in terms of getting your services, where can we contact you?
Emmanuel: Yeah, so I have a website emmanEmmanuel.com. And I’m also a available in LinkedIn or in Facebook Peak Wealth Solutions. So, I’m also a team an agency director. So if for example you’re also looking for an income source aside from your current income I can also teach you or coach you to become a financial advisor not just for the one to two years, if you want this can be your career for life.
Philippe: Wow, thank you for that. So that would be emmanEmmanuel.com and we’ll include all your links and your contact details so they can get in touch with you in your profile on our website. So thank you a lot for we appreciate you making the time.
I know that you’re there helping out the Filipino people, entrepreneurs and everyone just you know managing all this financial you know I believe this is a financial challenge for everyone. You know and because of people like you I think you will contribute to our you know our growth and success. Hopefully for the whole Philippines.
Emmanuel: Yes, bro. And also thank you for ano for for starting this podcast that features different anoknowledge bases. When I listen to your podcast as well as yung insure tech, I listen to that.
Philippe: Oh, really? With Olivia?
Emmanuel: Dami kong ano OSEAS ba yun or something?
Philippe: OSEAS, yeah.
Emmanuel: I learned a lot also from her. So, you know, it’s good that you’re doing this for free. For the additional knowledge of other people. Thank you.
Philippe: Yeah, yeah. You’re welcome.
