What Hinders Filipinos from Availing a Coverage Plan
When talking about insurance policy, there are different types of coverage available. Depending on what is covered in a policy, people can ensure financial assistance from life-altering situations that can render people financially incapable.
The everyday uncertainty stresses the importance of insurance should certain things happen. While preventing such occurrences is impossible, at least financially, people are in control as the insurance policy can safeguard them from impending obstacles.
Despite its significance, many Filipinos are reluctant to buy an insurance policy as most think of it as an impractical expense.
According to the 2018 article of Philippine Daily Inquirer, middle- to upper-income Filipinos who own insurance products are only 16 percent. The Philippines’ insurance penetration remains low. Many Filipinos’ traditional mindset that insurance is not an asset but a liability keeps them from getting insured. Many people still believe that bank accounts remain the most prominent financial tool.
When it comes to health insurance ph, 98 percent of the population has protection from the national health insurance program administered by Philheath to cover all Filipinos with affordable and quality health benefits. However, most Filipinos still lack the right type of insurance to keep them protected during unforeseen events. Here are some of the reasons that hinder Filipinos from availing of a coverage plan.
Lack of Financial Literacy
Financial literacy pertains to the knowledge people have regarding how money works, including financial management, investing and even expending. Many Filipinos lack financial literacy as many are suffering from financial insecurity, as seen from the apparent challenge Filipinos face when effectively managing their finances, which hampers their ability to cope during unforeseen life events.
Due to the lack of awareness, many people think coverage plans are costly. As such, many choose not to purchase one and even open a bank account. Filipinos have little understanding of financial planning’s importance for their needs, and financial assistance should emergencies arise. Hence, financial illiteracy often results in high-cost financial services and an increase in debts.
Only For The Rich
There are many misconceptions regarding insurance, and one of the most common misconceptions is that only wealthy people can afford coverage plans. The price of premiums varies on the coverage availed, and some can purchase affordable insurance. People with insurance are free to tailor and adjust their policies according to their income and earnings to be budget-friendly.
This myth is what people often expect for life insurance ph, as it is too expensive. In addition to the increase in the cost of living, insurance does not fit their budget; therefore, many believe it is a luxury only rich people can afford.
Stable Income
Many Filipinos choose not to get insured as they regard insurance as a liability and believe other expenses need to be prioritized. However, that is not the case for some people with more than enough income for their expenses, thinking they can live fine without insurance.
People who are already at the stage where a financial crisis seems unlikely to assume that whatever happens or risks that need financing is nothing to worry about: therefore, an insurance policy is impractical. However, there are inevitable risks that can threaten a person’s ability to earn and provide for their family. These include death stemming from health failure or accidents due to specific hazards.
Negative Connotation about Investment
Insurance is technically an investment that is useful beyond protecting the insured from a potential financial setback. However, many Filipinos do not want to invest as they believe it is only for the rich and people who want to prepare for an untimely death. The older generation still does not fully grasp the importance of insurance as an investment, affecting its implication in today’s younger generation.
Due to the coronavirus pandemic, some people only recently realized the importance of insurance in everyone’s lives. Many uninsured often face unaffordable medical bills and have bad access to medical care and preventative services.
Living in the Moment
Most Filipinos are content with receiving their monthly salary, enough for paying bills and basic needs. Often, many splurge by buying depreciating assets with the mentality that the money spent is the price of hard work, prompting many to acquire various wants. The lack of spare cash makes paying for coverage plans impossible.
Additionally, Filipinos are not keen on delayed gratification, and insurance would hinder immediate appeasement. Rather than valuing the need to save in emergencies, Filipinos can forget to separate wants from essentials.
Afraid of Taking Risks
Most people are risk-averse, with some avoiding everything that seems risky as it entails unknown results. It goes the same for purchasing a coverage plan as it can leave people unsure of possible returns while paying for premiums. Some Filipinos want something in return for what they are paying for, including insurance.
Filipinos Prefer Cash
Unlike foreign countries where credit cards are prominent for most transactions and expenses, Filipinos still prefer to pay in cash. In a sense, many find it better to pay in cash than letting the billing departments send it to their insurance providers.
In several cases, many are reluctant to trust insurance providers without the sense of knowing where their money is going. However, with cash, people can manage their finances better as having cash in tangible form makes it easier to track expenses. Moreover, they will not be subject to additional fees with coverage plans.
Lack of Concrete Financial Plan
Both wages and salary are the primary sources of income for most Filipinos, with their earnings spent on expenses for household, health, education, leisure, and utilities. Paying for basic needs is hard enough; much more when also paying for a coverage plan for later use without the guarantee of use.
Hence, many push back saving for the future to pay for expenses arguably in need of prioritizing rather than shopping for an insurance policy.
While people have respective reasons why they have yet to purchase an insurance plan or choose not to, having a coverage plan is undoubtedly essential as it can be an excellent and smart investment that can provide financial security in the long run.
It is never too late to reconsider and prepare for the future without the worry of financial ruin in the event of potential accidents and disasters. Visit a reliable comparison website insurance Philippines to help you find a suitable insurance plan for you and your family.
Sources:
Financial literacy for Filipinos: understanding for better living
Insurance penetration in PH remains low
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