The Philippines is prone to natural disasters, including typhoons, earthquakes, and floods. An average of 20 tropical cyclones enter the Philippine Area of Responsibility (PAR) annually, with about eight or nine making landfall. In 2024, the peak typhoon season from July to October saw six consecutive storms hitting the populous island of Luzon within 25 days. These disasters affected 16 million people and caused an estimated PHP 15.6 billion (US$266 million) damage to agriculture, housing, and infrastructure.

Natural disasters bring severe financial challenges to countless families and businesses each year. In these moments, financial advisors’ guidance is crucial. Three MDRT members from the Philippines share how they help their clients prepare and recover by leveraging insurance and emergency funds.

Maximizing insurance policy for emergency needs

Ann Ruth Gochingco, a 14-year MDRT from Quezon City, Philippines, recalls a client from Tacloban City in Visayas who suffered devastating losses when Super Typhoon Yolanda (Haiyan), one of the most potent typhoons recorded in history, struck the country in 2013. The client’s family-owned hardware store was submerged entirely, leaving them in a severe financial crisis.

Fortunately, the client had a Variable Universal Life (VUL) insurance policy with a substantial fund value. Gochingco advised her to access the funds as emergency cash and carefully explained the pros and cons. She then guided the client through withdrawing 80% of the funds, which were released within four working days. This financial support became instrumental in helping them restart their business and regain stability.

"This experience reinforced the importance of financial preparedness,” Gochingco said. After that experience, the client got two more insurance policies and expressed interest in getting one for her two kids. "She realized that insurance wasn’t just a policy. It was a financial safety net that could protect her family in times of crisis." It shifted the client’s perspective, helping her recognize insurance as not just a financial product but a tool for long-term financial security and resilience.

Getting a plan with cash value

Ma. Lourdes “Odette” Adoro, a two-year MDRT from San Mateo, Philippines, previously lived in Marikina City, a flood-prone area in Metro Manila. "I've witnessed and experienced firsthand how families struggle to recover when their homes and businesses are affected by flooding."

Aligned with Gochingco’s advice, Adoro encourages her clients to choose insurance policies with cash value, allowing them to access funds when needed. “I always tell my clients financial security isn’t just about saving. It’s about having access to funds when you need them the most." One of her clients from Metro Manila could partially withdraw from her insurance fund to recover from Super Typhoon Carina (Gaemi) in August 2024.

Besides maximizing insurance policies with cash value, she advises clients to build multiple income streams, strengthen their cash flow, and diversify their portfolios. “These strategies provide financial security and empower clients to make practical decisions, like relocating to areas less prone to flooding, without the added burden of financial strain.”

Financial risk management in disaster-prone areas

Jessyl Grace Patria-Torres, a six-year MDRT from Naga City, Philippines, strongly advocates financial risk management in disaster preparedness. “Living in the Bicol Region, one of the most typhoon-prone areas in the country, I always remind my clients that disaster risk management is incomplete without financial risk management.”

Torres faced the devastation of three powerful typhoons in 2020 while starting her financial advising career in the region of Bicol. The following year, she navigated a tough market and successfully opened her office. In 2024, Typhoon Kristine (Trami) caused severe flooding, and affected her office and many businesses and residents in the city. “Disaster preparedness is a key part of our annual office planning, and I extend this discussion to my clients as well.” One of her advisors had a client whose home was flooded. With her four-year insurance policy, she could withdraw a small amount to get her through the months of displacement.

Beyond cash value withdrawals, Torres highlights insurance’s comprehensive protection in disaster preparedness and recovery. “The financial cushion is helpful, but the real strength of insurance lies in its broader coverage. Benefits like death and critical illness protection are essential in times of crisis.” She encourages her clients to explore policies that provide additional coverage for unforeseen medical emergencies and property damages.

With immediate access to funds and long-term security through life and critical illness benefits, insurance ensures financial resilience against calamities for clients, offering peace of mind and economic stability in times of uncertainty.

Contact: MDRTeditorial@teamlewis.com

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Insurance is protection against calamities and natural disasters