In 2014, Insurance Commission head Emmanuel Dooc said he’s confident that insurance penetration in the Philippines would significantly increase because of the ASEAN integration last year. With the country currently the fifth with the most number of insurance buyers in the region, Dooc said he’s confident that we would move up in ranking due to the rise of micro-insurance and influx of new market players.
But while the outlook on insurance penetration in the country is positive, the actual number of policyholders in the country is low. Why are Filipinos not giving importance to insurance? And why should you start putting premium on insurance now?
Economic and cultural factors
Insurance penetration in the country is relatively low, especially when you stack the number of policyholders against the country’s population. Unfortunately, one of the two main culprits—and probably the bigger one—why Filipinos are not fond of securing their future is low income.
With low-income families prioritizing their current basic needs, they have little to spare for future emergencies. Aside from that, Filipinos also have a nasty spending habit; putting luxury over savings or insurance when they have extra money.
Aside from the economy, our cultural upbringing is to blame. Since Filipinos are not known as long-term planners, they don’t consider the many contingencies that may befall them. Furthermore, some of us see insurance as a mere luxury that only those who have extra disposable income.
While these factors may be the biggest culprits that can affect why people are not getting insurance, there are many reasons why people should give more importance to insurance.
Five reasons you should get insurance
1. Safety and security. Probably the biggest benefit of buying insurance. Getting insured means providing yourself with an extra layer of security against the uncertainties of life, whether natural or man-made. Since unfortunate events can strike any time without notice, they can cripple you financially and leave you with nothing.
2. Source of revenue. When you pay for your insurance premium, companies invest your money in different revenue-generating sectors, such as government stocks and securities as well as in the private sector. When they invest these in other companies, their capital is then turned to jobs which, in turn, provides income for the people involved. Your premium goes a long way.
3. Good money habits. Getting insurance means you need to revamp your money habits. Especially for policies that require monthly payment like life insurance, you need to make sure that you don’t miss payment of your dues. Hence, you become wiser with your money.
4. Spreading risks. If you think that you’re getting your compensation from your contributions, think again. You are not the only one insured; the risks are spread throughout all insurers and everyone has to shoulder one another. When a loss occurs to you, other people are paying for your compensation with their payments and you also do the same for others.
5. Less worries. Do you want peace of mind whenever you go out and brave through life? Insurance is your friend, and by having yourself insured, you can stop worrying about the future and put your mind to others that matter. Worried that you may not have enough money in the future in case an unfortunate event debilitates your finances? With insurance, you can stop worrying about living and love life.
Insurance is a good thing, and while a lot of Filipinos haven’t realized it yet, it is never too late to get themselves insured.