Insurance products are still a bit foreign to the majority of common Filipinos. There is a general lack of awareness among the poor. Not only are they not aware of the existence of these products, they also do not perceive the value and importance of such in their lives.
In Comes Microinsurance
Of course, everyone tried to remedy the situation. Thus, we see an increased proliferation of TV commercials and other ad campaigns in favor of affordable life and non-life insurance products. According to the Insurance Commission (IC), there were about 28 million Filipinos already covered by microinsurance as of 2014.
That is a significant figure. Yes, it accounts for a small portion of the general population in the Philippines, yet it is already a significant increase compared to the dismal figures in the past few years. It is worth mentioning that most microinsurance providers in the country only offer a token coverage of PHP 5,000 to PHP 10,000 per household, which consumers may not find attractive.
However, if you consider that sum in the hands of a tricycle driver or say the fisher folk, it is already a considerable amount in case the bread winner isn’t able to provide for the family at the moment. That little money is insignificant to well-paid corporate types, but in the hands of the Filipino poor, that money will save lives.
Available Insurance for the Filipino Masses
Since there is a thrust to provide more affordable insurance products to the Filipino masses, they should be made aware of the available types of products that will be helpful to them. The common folks should at least know the difference between life and non-life insurance.
To make things simple, life insurance means that in case the person who bought the insurance product dies, the insurance company who sold the product will give a certain amount of money to the beneficiaries that the buyer has chosen previously.
Non-life insurance is almost the same except that one’s life is not the thing being insured. It is applied to property such as a house, boat, motorcycle, car, or truck. In case these things get damaged or destroyed, the insurance company will provide the buyer of the insurance a certain amount of money to cover the loss. All insurance products in the country fall into either category. The idea, of course, is that the future is uncertain. Thus, an insurance product can be a big help when disaster and loss strike.
Micro Insurance in the Philippines
Microinsurance is definitely good news for the Filipinos. It is interesting that smaller financial players, including pawnshops with a nationwide presence, have taken up the role of delivering these much needed products.
For instance, Cebuana Lhuillier offers a basic non-life insurance product that costs only PHP 25. It covers the insured for four months, offering up to PHP 20,000 for dismemberment or accidental death.
They also offer a group accident insurance for employees that costs only PHP 210, which will be valid for 1 year. Other insurance products include those for security guards, students, home insurance, and insurance for barangay police.
Again, the coverage amounts will seem small, but they’re substantial in the hands of the masang Pinoy. These are investments that the Filipinos should be aware of.