IN one of his syndicated columns, American humor writer and columnist Art Buchwald wrote that insurance is an investment one does not want to have an ROI (return on investment).
Receiving an ROI simply means that the buyer of the insurance has passed on. This holds true until the late 1980s. The algorithm changed at the onset of the 1990s with insurance products taking an altogether different configuration. From an investment product that some wouldn't want to be associated with, insurance became a comfort investment vehicle. Accordingly, the buyer even looks forward to getting an ROI after a certain given time, depending on his choice of product.
Insurance is a surprisingly affordable and simple option to provide your family with financial protection. From this perspective, it’s not enough to simply look at insurance as “investment” as many marketers now foist upon us.
I, for one, subscribed to a five-year insurance program shortly before the pandemic. The subscription timing was perfect as the importance of having insurance for protection as its primary value and investment as secondary benefit was stirred by Covid.
The pandemic has radically transformed the world in the past two years. Businesses closed down. Jobs and lives were lost. While loss of life is inevitable, there is a way to manage its impact on those who have to carry on and that’s by having a back-up plan – insurance, explains Renato A. Vergel De Dios, President and CEO of BDO Life, a wholly-owned subsidiary of BDO Unibank and an emerging leader in the life insurance industry.
The lack of appreciation for planning and the inability of the life insurance industry to educate about the real benefits of life insurance are among the reasons for the low subscription rate.
Reluctantly, Mr. Renato, who steered BDO Life steadily advanced its standing in the industry, admits that the insurance industry “has not communicated enough how a life insurance purchase is an expression of love for family and responsibility to provide for them beyond this life.
Among adult Filipinos, it was found that the total life insurance ownership was only nine percent. Unaffordability, they don’t see the need, they get nothing from it, and they don’t trust insurance companies are among the various reasons why people don’t buy life insurance.
Awareness and educating the people are the keys to improve subscription. To help Filipinos appreciate the value and use of life insurance, BDO Life launched a campaign about its Plan B concept or the fall back position.
Everyone is so in love with a financial plan that incorporates adhering to a budget, managing our expenses, and augmenting our income sources. With the amount of savings from these measures, the insurance firm can create a Plan A consisting of an emergency fund and investment program.
If Plan A consists of savings and investments, Plan B takes the form of life insurance, which takes into effect when Plan A fails. Life insurance is your Plan B, the safety net that will enable your family to recover from the grief after you pass away without being burdened by immediate financial worries.
We need to take life insurance seriously. Many of us take for granted that we will continue to be healthy, have enough time and energy, and live long enough to keep earning income. Such is unrealistic.
The lingering virus showed us that we are all at risk of illness, disability, job loss, and worst, death. That said, insurance is needed as the wheels of life continue to churn.
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