It is interesting to note that the Philippines is both the third most vulnerable country to the negative impacts of climate change, and is also the country with the third-largest insurance gap that stretches to $4.9 billion, according to the 2018 Underinsurance Report of Lloyd’s, a leading global specialist insurance market.
The insurance gap is the inadequacy of the level of insurance in place to cover risks and the actual costs of loss and damage. In the Philippines, the regularity of natural disasters and the damage they wreak on lives and property should drive people to invest more in insurance to help them cope with emergency expenses, but many Filipinos remain misinformed about insurance, leading to the lack of adequate insurance for those who need it most.
To help alleviate the situation, BPI-Philam Life Assurance Corp., the number one bancassurance company in the Philippines, debunks some of the common misconceptions of people about insurance:
The first misconception is that insurance is expensive and only for the rich. According to BPI-Philam, insurance plans vary in prices based on coverage. There are various offers available in the market, depending on income, earning ability and cash flow. Thoroughly scouting for options that would work best for one’s unique needs and working budget is a sure-fire way of picking out the best insurance plan.
A middle-income earning Filipino needs insurance more than a high-income earning Filipino because a high-income person has liquid funds to pay for emergency expenses. Meanwhile, the availability of the cash flow for the middle class normally has different allocations depending on their lifestyle. In case an emergency happens, the budget allocations will be disrupted.
If one still finds it difficult to choose an insurance plan, starting with a basic package is a good start. A great option would be BPI-Philam’s Family Care Plus, a life insurance plan that provides financial protection for the insured and their loved one under one coverage. After 10 years, the plan automatically renews for another 10-year period as long as all premiums were paid and no claims were made during the 10-year term. Family Care Plus covers a wide range of critical illnesses and procedures while also encouraging clients to cultivate a healthier lifestyle through Philam Vitality.
The second misconception is about viewing insurance as “you die, we pay”. BPI-Philam said life insurance does more than simply placing a monetary value on the insured’s life. Although the most common perception of a life insurance is a way of financially securing the insured’s kin once they pass, it is not the only function it serves. It can be used to fund the insured’s retirement or help in achieving other financial goals. Having an insurance plan with an added investment, such as a variable universal life plan, can greatly aid in financing future expenditures such as education and housing.
The third misconception is that young adults don’t need insurance. The best time for an individual to have an insurance plan would be as early as possible. Premiums for a younger market are more affordable, and therefore more ideal. Aside from the obvious benefit of financially covering unfavorable incidents, such as accidents, critical illness or death, another good reason for having an insurance plan at a younger age is that it allows the investment to grow and mature over time. This can lead to financial independence, and cover one’s retirement. Hence, the earlier an insurance is subscribed to, the more time the insured has in building his or her potential retirement fund.
“Health issues make one unqualified for insurance” is another misconception. While the premium for a person with health concerns may be higher than one with a relatively clean bill of health, having an insurance coverage is still feasible. There are available insurance plans in the market that cover both minor illnesses and critical conditions. The key is being fastidious in finding the most appropriate plan for one’s self.
The fifth misconception is that HMO coverage is enough. Having an HMO coverage is great for preventive care services, such as checkups and immunization. However, an HMO will most likely be insufficient to cover both the insured and their kin in the long run since some insurance policies granted by one’s company are nontransferable. Having a personal insurance plan is ideal. It is even better if you have both. Ask your agent about available personal insurance plans and see which one would work best for you.
“Insurance is especially crucial to Filipinos who are frequently affected by natural calamities and those who want to get ahead. What’s more, one’s insurance plan can also double as a retirement fund upon maturity,” BPI-Philam said.