It’s typical for Filipinos not to tackle personal finance in general, particularly life insurance. Such topic is usually frowned upon, and even when it becomes part of a conversation, the ideas usually come from pre-conceived notions or from secondhand experiences i.e. ‘narinig ko lang.’
This explains why insurance penetration in the Philippines, or the number of Filipinos being insured remain below or around 2% in recent years. When we don’t understand something, we are less likely to take interest in it more so purchase or get one for ourselves.
Hence, I made this list of common myths about life insurance in the Philippines you should stop believing and the “real talk” truth behind them so you start taking action.
Here are 6 of them:
Myth #1: “Pang-mayaman lang ‘yang life insurance eh.”
(It’s only for the wealthy!)
Wrong! If you compute your weekly expense on coffee or other drinks, you will be surprised to know that life insurance costs just as much or maybe much less.
A type of life insurance plans called term insurance exists that you may purchase for as low as around P 3,000 per year for a P 1,000,000 death benefit (varies based on age, gender, occupation, and health status), increasing yearly upon renewal.
Worth highlighting that life insurance is a financial tool that helps everyone manage risks, or in case something happens, and it doesn’t have to be that expensive (at least at first).
Myth #2: “Bata at malakas pa naman ako.”
(I’m young and healthy!)
This is where the concept of risk management comes in: you really do not know what happens to you in the next hour, tomorrow, or the next day.
It is best to be prepared when a sickness, accident, or sudden death happens. That is how life insurance operates. By the time you think you need it, it will either be too expensive or you are already “uninsurable”, meaning no longer qualified or accepted by the life insurance company because the risk is already too high.
Like a fire extinguisher or a spare tire, you don’t buy it when you do need it. You have to be ready in case you need it.
Myth #3: “Sapat na ‘yung insurance ko sa office at government benefits ko.”
(I have insurance and benefits as an employee!)
Congratulations for having these benefits in your work because not everyone enjoys these benefits.
Unfortunately, if you do the math and be honest about it, they are not usually enough: PhilHealth for healthcare and SSS for retirement. Plus, insurance provided by your employer is usually tied to your employment. If you resign, get laid off, or retire, that coverage disappears instantly.
It pays to have separate coverage as an individual and not as an employee.
Myth #4: “Hindi ko naman kailangan ‘yan kasi single naman ako.”
(I am single and not a breadwinner!)
Life insurance is not just designed in case of death, it also comes with living benefits. This means that you do not have be partnered or married to gain the most out of a life insurance plan.
You may be covered in case of an accident, a diagnosis of an illness, or a confinement. All of those incur costs even if you are single. There are also life insurance plans that come with unit-linked investments or savings in case you are unable to use the coverage.
Moreover, circumstances may change in the future – you are single now, but you may have someone in the future depend on you and your income especially if you plan to get married and have a family. If you get insured today, you lock in the lowest premiums and be prepared for whatever happens your way dead or alive.
Myth #5: “Mga insurance companies lang yumayaman d’yan. Scam ‘yan!”
(Life insurance companies are scammers!)
It is totally understandable for others to lose trust with insurance companies especially those who have fallen victim to pre-need companies which promised returns but failed to deliver. As life insurance consultants, we get that sentiment a lot.
However, pre-need companies are different from life insurance companies.
Additionally, life insurance companies are legitimate companies regulated by the government primarily by the Insurance Commission. There are also safeguards in place now mandated by said agency to ensure the clients’ interest in the future like requiring minimum reserves from each company to guarantee claims.
So no, life insurance is not a scam – for as long as you deal with licensed agents from reputable companies and enter into valid contracts, your money is protected by law.
Myth #6: “Iipunin ko na lang o ipapasok sa business ang pera ko.”
(I rather save or invest in a business!)
Your savings are important, but they may not be enough for major medical expenses or income replacement in case of disability or death for years.
Life insurance provides a financial safety net that protects your family’s long-term needs. You pay an X,XXX amount and get an X,XXX,XXX amount. Only life insurance can do that.
It’s good to invest in your business, but also invest in protecting it – you will lose every asset and business if you fail to prepare for the risk that can happen anytime – illness, disability, or death.
Are you now convinced about what’s true and not true about life insurance?
Talk to a legitimate life insurance consultant now and learn more.
