Insurance Truth and Consequence | Dec. 13, 2022

Insurance Truth and Consequence | Dec. 13, 2022

During the pre-Hispanic era, the concept of insurance as it is known today was nonexistent. The pre-Hispanic Filipinos, relying mostly on hunting and gathering for their subsistence, did not have the need for it as they were more concerned about how they would survive. Thus, every loss of a family or tribe member was borne alone by the spouse, family, or tribe to which the deceased belonged.

Today, insurance is still a tough sell despite the pandemic.

What happens to remaining loved ones when someone passes away? Death is an inevitable reality, and breadwinners worry about taking care of bereaved families. Families depend on those who bring home the bacon that may suddenly be no longer there. Therefore, breadwinners should invest in a good life insurance plan and put these worries to rest. An insurance investment will take care of the family left behind in any stipulated situation and will help in replacing lost household income, paying for the education of the kids or siblings, and even providing financial security to the partner or significant other if something untoward happens unexpectedly.

As the debate on whether investing in life insurance is a good idea or not continues to date, breadwinners can surely conclude that there are more reasons why they should do it if they were to only canvas around a bit. Buying insurance is one of the most important financial decisions because it reduces the financial impact of unwanted and unexpected events. The importance of investing in insurance cannot be stressed enough because it is designed to offer financial safeguards against the policyholder's death. It also works as a good investment plan by helping the policyholder meet several life goals in turn. Investing in insurance should not be perceived as a burden, but rather, as a necessity for safeguarding the family from risks and for ensuring greater peace of mind.

This is a cornerstone of financial literacy.

According to The Manila Times report last Sept. 9, 2022, the Philippines lags behind its Southeast Asian neighbors when it comes to financial literacy. A 2015 World Bank survey has found that Filipinos have the lowest financial literacy in the region at 25 percent, compared to 59 percent in Singapore, 52 percent in Myanmar, and 36 percent in Malaysia, among others. This means that many Filipinos are unable to properly manage their personal finances and are facing unsure futures.