Debunking Some of the Common Myths of Life Insurance: Why Do Filipinos Avoid It?

debunking common myths and misconceptions life insurance

Are you one of those people who avoid life insurance agents because you’re assuming they will offer you a product? Do you think paying for insurance premiums is expensive and a waste of money?

You’re not alone. Many Filipinos feel the same way because they believe in these common myths and some misconceptions passed down from their parents and relatives.

One of the most common myths is that people think they don’t need it because they’re young and healthy. It’s better to start as early as possible because the longer you wait, the higher insurance premiums you have to pay. Let’s debunk some myths around life insurance and explore why people avoid paying premiums.

Myth #1: “Life Insurance is only for old people.”

Wrong! You can buy whole or term life insurance at any age, and there is no upper age limit for purchasing life insurance, provided that premiums do not increase with your age.

This type of protection will provide financial and emotional security for those who depend on your income, such as your spouse, children, family members, and other loved ones, if something happens to you, such as an accident or illness.

Under this plan, if the insured dies, the beneficiaries will receive a payout to cover living expenses and outstanding debts.

Myth #2: “Life Insurance is too expensive.”

Life insurance is not cheap, but it’s affordable. A standard plan costs around P1,000 per month if you buy it starting at age 25 or so, depending on the insurer and the amount of coverage required for everyone who depends on you.

If that’s the case, the annual premium costs only P12,000. Because of medical underwriting (intrinsic risk), plan premiums increase as you grow older. If existing health conditions may result in a higher chance of death, then expect your monthly premium to be priced accordingly with your risk profile for life insurance.

Imagine, if you’re spending an average of P200 per cup at Starbucks or Coffee Bean five times a week and multiply it by four weeks, you’re spending P4,000 a month. If you cut your coffee expenses, you can already cover your monthly premium.

Myth #3: “I am young and healthy I don’t need life insurance.”

This is a common misconception among young people. It’s true that you are healthy now but what will happen in the future if something happens to you? We don’t know for sure.

Better to have life insurance just in case an illness or accident catches up with us. If ever something terrible happened, your family would be financially protected. If you get it early at a young age, you have the advantage of paying the premiums at a lower cost than those who get it in their 30s or 40s.

If you’re fit, healthy, and have an active lifestyle, all the more that you can explore some life insurance products that cater to your lifestyle because they offer rewards and additional benefits as you stay active.

Myth #4: “I don’t have enough money to pay for premiums.”

You may opt to buy traditional life insurance without the riders and additional features such as investment-related plans. Basic plans are cheaper, and you can always ask for a financial advisor at your chosen insurance company for a quotation depending on your age and budget.

Check out all your options before making a decision. It’s better to get 4-5 quotes from various insurers to know how much protection you need and the price range of each plan so you can make an informed decision on which insurance company is best for you, depending on your budget constraints.

You can always tell the insurance agents how much you’re willing to pay every month, quarterly, semi-annually, or annually and they will find a way to create a custom proposal.

Myth #5: “When my kids grow up, they will take care of me.

If something happens to them, then who will take care of you? Don’t rely on your kids because life is unpredictable. If ever any accidents happen, you want to be sure that your family will be taken care of for the rest of their lives.

While the Filipino culture is always family-centered, it’s about time to cut that toxic mindset that you will depend on your children to take care of you when you grow old.

This is one of the reasons why even young people today, especially those who are breadwinners in the family, can’t save money for themselves because other family members are milking from a single income.

Myth #6: “I can get an insurance policy when I get married.”

Never wait for marriage to buy term life insurance because you never know what might happen before your big day.

The insured person may be diagnosed with cancer or another disease that could give them only a short time to live. Hence, it’s better to have protection early in life instead of being sorry later when you realize all your money is gone and no one is left to support your family financially.

Don’t put off until tomorrow what you can do today. You may want to talk with a financial planner or representative specializing in insurance to make sure you’re making the best decision for yourself and your family.

Myth #7: “Insurance is a scam.”

We can’t blame people who think this way because some companies, including reputable ones, file for bankruptcy after a few years when they accumulate wealth. However, this is the reason why you must choose an insurance company with an excellent track record.

You can always search for the top 10 insurance companies in the Philippines and read third-party reviews about their products and services. Everything else you need to know about them is published online. Sunlife of Canada, Philippine AXA, BPI AIA, Pru Life Insurance Corporation of UK, and FWD are some of the famous companies you can compare online.

Insurance is protection from financial losses that you can’t prevent. If you have a car, you need to buy car insurance, and if you own a home, you need to purchase homeowners’ insurance. You do these things to protect yourself and your family from future worries and uncertainties.

Myth #8: “There’s too much paperwork and reading involved.”

Yes, of course! It’s because buying an insurance plan is also a commitment, so you need to spend time reading the fine print to make sure what you’re getting into. But the good news is that you can always ask your insurance representative to discuss the details with you, even online via Zoom or video calls.

Since the pandemic, insurance companies are also taking advantage of the technology to reach out more potential clients who want to know more about their products. It will only take an hour or so, and you can always have a copy of the proposal so you can review it properly at your own pace and determine your risk.

Be sure to ask about the underwriting procedures being used so you know what’s expected of you before, during, and after applying for life insurance.

Final thoughts

We’ve debunked some of the most common myths about life insurance in this blog post. The truth is that people of all ages, stages and income levels need to protect themselves and their loved ones with a policy against death or disability.

You can’t predict what will happen tomorrow, but you know for sure that today doesn’t last forever, and if anything were to happen, it would be too late to get coverage. We hope that this article has helped you think about your future and the importance of having life insurance.

As always, you don’t have to get the most expensive plan to get started. If you have friends who work at any of these insurance companies we mentioned above, maybe it’s about time to ask for a quotation so you have an idea of how much you need to spend and what are benefits you will receive.