[Finterest] Landbank offers free life insurance for upgraded savings accounts

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[Finterest] Landbank offers free life insurance for upgraded savings accounts

Land Bank of the Philippines' Facebook page

Accounts with an average daily balance of P50,000 get P50,000 in personal accident insurance coverage, while keeping P500,000 in your account bumps it up to P500,000 in life insurance

MANILA, Philippines – Landbank is now offering free accident and life insurance coverage to clients who upgrade their existing OptiSaver savings accounts to the new OptiSaver Plus.

The upgraded savings account gives depositors free insurance coverage based on their average daily balance (ADB). Account holders with a minimum ADB of P50,000 can now enjoy either free life insurance or personal accident insurance, depending on their balance tier. Those in the top bracket — maintaining at least P20 million — can receive both.

The OptiSaver Plus account also comes with tiered interest rates of up to 4% per annum, accrued daily and credited at the end of every month. However, note that the interest rates are subject to quarterly repricing.

New OptiSaver Plus accounts can be opened at any Landbank branch and come with a passbook for monitoring, though note that the minimum initial deposit and required daily balance to maintain the account is P50,000. Meanwhile, existing OptiSaver account holders who want to access the insurance perks can visit their branch to upgrade and fill out the required forms. Those enrolled in online banking may also receive an email from their branch with the necessary documents.

“With the Landbank OptiSaver Plus, we are empowering our clients to achieve financial growth while securing their future,” said Landbank president and chief executive officer Lynette Ortiz. “By combining the benefits of higher savings potential and built-in financial protection, we are ensuring their hard-earned money works even harder for them as they build wealth with confidence.”

How does the free insurance work?

The insurance coverage is provided by Landbank’s insurance partner, Cocolife. It scales with your average daily balance, offering either life or personal accident coverage depending on the tier.

Here’s how it breaks down:

Average Daily Balance (ADB)Life InsurancePersonal Accident Insurance

P50,000 – P99,999.99	None	P50,000
P100,000 – P199,999.99	None	P100,000
P200,000 – P299,999.99	None	P200,000
P300,000 – P499,999.99	None	P300,000
P500,000 – P999,999.99	P500,000	None
P1,000,000 – P2,999,999.99	P750,000	None
P3,000,000 – P4,999,999.99	P1,000,000	None
P5,000,000 – P6,999,999.99	P1,250,000	None
P7,000,000 – P8,999,999.99	P1,500,000	None
P9,000,000 – P9,999,999.99	P1,750,000	None
P10,000,000 – P19,999,999.99	P5,000,000	None
P20,000,000 and above	P5,000,000	P1,000,000

To claim benefits, users must file within 30 days of the insured event and provide valid ID and supporting documentation. Note that the insurance is only valid while the account maintains the required minimum ADB.

This is where you need to be mindful of how ADB is calculated. ADB is the average amount of money held in your account over a certain period, like a calendar month. Banks calculate this by summing up the end-of-day balances for each day in the period, then dividing by the number of days. This means if your balance dips too often or falls below the required threshold, you could lose eligibility for the free insurance, even if you hit the target amount earlier in the month.

While the insurance coverage might not be massive, especially at the entry-level, it’s still a welcome perk for savers who weren’t expecting any coverage at all. It’s free, after all. However, if you’re thinking to rely on this to be your main insurance coverage, you might want to reconsider. Generally, your insurance coverage should be several times your annual income, or enough to replace lost earnings, pay off debts, and support dependents in the event of a tragedy.

The maximum free life coverage under the OptiSaver savings account is only P5 million, which may sound quite attractive, but remember that’s assuming you’re maintaining an average daily balance of P20 million. In that case, a P5 million payout sounds disproportionately low given the level of assets you’re already managing.

Those seeking larger or more comprehensive coverage might want to explore additional options. Traditional term insurance and variable life policies (like Singlife’s Income Multiplier) can offer higher protection levels for a separate premium. – Rappler.com

Finterest is Rappler’s series that demystifies the world of money and gives practical advice on managing your personal finances