Life insurance is an essential aspect of financial planning for many Filipinos. In the Philippines, life insurance has become increasingly popular in recent years as people become more aware of the importance of protecting their families' future financial well-being.
It wasn't until I turned 26 that someone emphasized its significance to me personally. Let me share why life insurance matters to many of us in the Philippines.
First and foremost, our strong cultural emphasis on family plays a significant role. In a country where family ties run deep, protecting our loved ones' future becomes paramount. This realization dawned on me when I learned about the role life insurance plays in securing our family's financial stability.
One reason why Filipinos are interested in life insurance is the strong cultural emphasis on family. Many Filipinos have large families and extended networks of relatives, and they place a high value on supporting and caring for one another. This started in the year 2000 where the advent on insurance agents have transitioned to being a so called Financial Advisors.
Life insurance can provide a crucial safety net for families in the event of the unexpected loss of a breadwinner. In this way, life insurance can help ensure that family members to be able to continue to support one another and maintain their standard of living even in difficult circumstances.
Another reason why Filipinos are interested in life insurance is the recognition that it can help provide financial security in the long term. Many Filipinos are concerned about their retirement and ensuring that they have sufficient resources to support themselves as they age. Life insurance policies that include savings and investment components can help individuals build up financial assets that they can tap into later in life, helping to provide a sense of security and peace of mind.
In addition to these reasons, there are also practical factors that make life insurance attractive to Filipinos. Life insurance policies in the Philippines are often relatively affordable, and they can be customized to suit individual needs and circumstances. This means that individuals can choose coverage levels and policy terms that make sense for their specific financial situation and family needs.
Additionally, life insurance can also provide important tax benefits to Filipinos. Under Philippine law, life insurance policies are generally exempt from income tax, making them a tax-efficient way to save and invest for the future.
Although in the Philippines, the importance of life insurance has been emphasized over the years, as more Filipinos recognize the value of protecting their families' financial future. But how many Filipinos actually have life insurance?
According to a survey conducted by the Insurance Commission in 2017, only 16.8% of Filipinos have life insurance coverage. This means that out of the 110 million population of the Philippines, only around 18.5 million have life insurance. This number is significantly lower compared to other countries in Southeast Asia, such as Singapore, Malaysia, and Thailand, where the penetration rate for life insurance is much higher.
The same survey also revealed that the primary reason why many Filipinos do not have life insurance is due to a lack of awareness and understanding of the product. Many Filipinos still see life insurance as an unnecessary expense, without realizing that it is an investment in their family's financial security. In addition, many Filipinos also have misconceptions about life insurance, such as the belief that it is only for the wealthy or that it is difficult to understand. Stay connected to this blog as I post some of the updates on Finances.
Furthermore, the COVID-19 pandemic has highlighted the need for life insurance, as more and more Filipinos become aware of their vulnerability to unforeseen events. The pandemic has forced many Filipinos to prioritize their financial planning and to secure their future in the face of uncertainty.
The good news is that the life insurance industry in the Philippines is steadily growing, with an annual growth rate of around 6%. Insurance companies are also making efforts to increase awareness and understanding of life insurance, through various marketing campaigns and educational programs. Did you know the number 1 Life Insurance company in the Philippines for 2023? To see the list of the top company's performance, find out on this link.
The Insurance Commission is also implementing policies that aim to improve access to life insurance for Filipinos, such as the mandatory inclusion of insurance products in the government's social security system.
In conclusion, life insurance is an important financial tool for many Filipinos. From the strong cultural emphasis on family and kinship ties to the recognition of the need for long-term financial security, there are many factors that make life insurance an attractive option for those seeking to protect their families and build a secure financial future. With the availability of customizable policies, affordable premiums, and tax benefits, life insurance is an accessible and practical way for Filipinos to invest in their own and their family's financial well-being.
Jack speaks at conferences across the Philippines on topics such as family finances, and personal and professional growth.
You can contact Jack Marbida through his social media accounts or email him at papajackph@gmail.com or jacky.n.marbida@sunlife.com.ph.
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