This Mom Shares How She Budgets for Medical Expenses in Her Single-Income Household“The key is careful planning and being ahead of life's risks,” she says.CREATED WITH PHILAM LIFE
Vanessa Legaspi, a single parent to three kids, is careful about her spending. The 39-year-old mom works as a financial adviser so, unlike regular office workers, her income varies. Suffice to say, she earns enough to cover basic needs, as well as her family’s healthcare and medical expenses.
Through her job, Vanessa saw firsthand how medical expenses can exhaust a family’s savings. For example, she witnessed how a cancer diagnosis became both an emotional and financial burden to one of her friends and her family.
“[My friend’s] confinement immediately exhausted her HMO (health maintenance organization) coverage, and she had to shell out her own money to pay for bills. She didn’t have any critical illness insurance,” Vanessa relates. “Her family spent around Php4 million. This almost exhausted her parents’ savings. Unfortunately, she passed away.”
Vanessa realized how unforeseen spending, such as medical expenses can bring about a financial crisis. “We will do everything to extend or save a loved one’s life, even if it drains the family’s lifetime savings or bury us in debt,” she says.
She learned planning ahead is the answer to financial stress. “The key to life’s uncertainties is careful planning and being ahead of life’s risks. We have to accept the fact that risks do exist and that it knows no age, so we can better anticipate how we can properly allocate our money. We can manage it only if we are ahead by one or two steps,” Vanessa explains.
Budgeting has always been a challenge, but Vanessa makes sure to allot money for emergencies. In her case, her emergency fund is three months’ worth of her monthly expenses.
In 2007, she started actively investing in health insurance. “With health insurance, you can anticipate your expenses by just paying the premiums and passing the risk to an insurance company,” she explains.
Finding the right policy
In choosing right healthcare insurance, Vanessa made sure to look into the list of critical illnesses covered, the issue age and the age the claimant will remain covered by the policy, and the ease of filing a claim.
She also applied for medical insurance for each of her kids, using her background as a financial adviser and skills to work around the necessary payments.
“I can instantly create the fund — say, a million per child — but I don’t need to have it outright. For example, for my 12-year-old, I only set aside less than Php20,000 per year for 19 or 20 years, but I have him covered for a million.”
For single-income families, those with limited income, or first-time policy owners, Vanessa has this advice: “Get an insurance [policy] that has a longer pay period because it is more cost-effective. It has high coverage with a low premium. For those with [extra] budget, getting an insurance [policy] with savings (variable universal life type, or VUL) is also good, so while you’re protecting the family’s income, you’re also saving for the future.”
So far, her investment has paid off. “I’ve had medical reimbursement due to an accident. I did not have to shell out a single centavo because of my HMO and insurance,” she shares.
Putting finances in order
In the past, Vanessa knew she had to save money for her future, but she didn’t have a very good appreciation of insurance and its benefits, and of growing her savings although she was very much willing to learn.
“When I became a financial advisor, that’s when I really started putting my finances in order. It’s still a challenge even today, but having health coverage gives me peace of mind. It gives me [the] motivation to really strive hard and save for my dreams,” she says.
Vanessa proves that with the right mindset, discipline, and priorities, it’s possible to budget for your family’s daily needs and healthcare coverage.
The AIA Critical Protect 100 is a life insurance plan by Philam Life that protects policyholders against 100 critical illnesses from ages 0 to 100. It also has additional benefits after paying a certain fee, such as the Gender-Specific Rider Benefit and the Recovery Benefit, which covers gender-specific illnesses and expenses for treatment and recovery, respectively.
AIA Critical Protect 100 is powered by Philam Vitality, a wellness program that allows you to earn points and get rewards, including as much as 50-percent coverage boost on the face amount of your plan when you need to use the policy — provided you follow the program religiously.