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Tailoring protection to every life stage

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December 10, 2024
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Tailoring protection  to every life stage
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Life is inherently unpredictable. Unexpected medical emergencies, sudden income loss, or unforeseen damages can quickly disrupt the stability people worked so hard to build.

Take health emergencies, for instance. According to the Philippine Statistics Authority (PSA), out-of-pocket health expenses accounted for 44.4% of total health expenditures in 2023, which is a heavy financial burden for the average Filipino, especially when medical treatment can easily run into the thousands.

This kind of situation exemplifies how insurance acts as a financial safety net, protecting individuals from unforeseen risks and providing stability during adversity. In turn, health insurance covers a significant portion of medical costs. Instead of depleting their savings or relying on loans, individuals can receive the necessary treatment without the overwhelming expenses.

But insurance is much more than just protection against health-related risks, as policies also help individuals save and plan for future milestones like education, marriage, and retirement.

Despite the low insurance penetration rate in the Philippines, the insurance industry saw substantial growth in the first half of 2024, with net income hitting P28 billion, a 24% increase compared to the previous year.

The same report from the Insurance Commission revealed a 14% increase in insurance density, with average individual spending on insurance rising to P1,907.19 from P1,667.50.

Yet, the surge in spending has not translated into broader coverage for Filipinos. For the majority of Filipinos, insurance is still perceived as a non-essential expense rather than a financial safety net.

Insurance as a safety net

As individuals progress through different phases of life, their insurance needs necessitate a tailored approach to coverage.

In the early stages of adulthood, many are just starting their careers and may not yet have significant financial responsibilities. However, this is the ideal time to lock in life insurance rates while they are still low. According to Investopedia, purchasing life insurance early can save people money in the long run, as premiums typically rise with age and increased health risks.

Marriage often brings shared financial obligations, making insurance even more important. According to Bankrate, married couples should consider life insurance essential for protecting their spouse’s financial future. They have the option of obtaining separate life insurance policies or a joint life insurance policy. Along with life insurance, critical illness insurance can provide additional support if one partner faces a severe health crisis while health insurance helps couples avoid the financial strain of medical bills.

Meanwhile, parents naturally begin to think about their children’s future, and life insurance becomes a tool for ensuring that their educational and upbringing needs are met — should the worst happen. Research shows that parents often feel underinsured, which is why increasing life insurance coverage is critical for them.

Under the Philippine Health Insurance Corp., also known as PhilHealth, solo parents and their children are now entitled to free insurance coverage under the National Health Insurance Program.

By midlife, many are facing peak financial responsibilities: mortgages, college expenses, and retirement planning. Adults in this age group often fail to regularly review their insurance policies, which can result in inadequate coverage when life demands the most. This is the perfect time for people at this age to reassess their needs and consider supplemental plans as healthcare costs rise. Retirement planning also becomes a top priority, with many turning to retirement accounts to secure a stable financial future.

When retirement finally arrives, income often decreases, so annuities can offer a steady income stream during this stage. With age, healthcare needs also increase, making comprehensive health insurance essential for managing medical expenses in retirement. — Mhicole A. Moral

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