The misperception of life insurance in the Philippines
Money Matters

The misperception of life insurance in the Philippines

Life insurance is a powerful financial tool designed to provide security and peace of mind for individuals and their loved ones.

However, in the Philippines, there exists a notable reluctance among Filipinos to embrace life insurance.

This skepticism toward life insurance is often rooted in various misconceptions and cultural factors, but understanding the importance of this financial instrument is crucial for a secure and stable future.


Cultural misperceptions

Life insurance is often misunderstood in Filipino culture. Some view it solely as an expense rather than an investment in financial security.


The perception that life insurance is only beneficial in the event of death can deter individuals from exploring its broader financial advantages, such as savings and investment opportunities.

Immediate financial pressures

Filipinos, particularly those with modest incomes, often face immediate financial pressures. The need to cover daily expenses, education and housing can overshadow the consideration of long-term financial planning. Life insurance premiums might be seen as an additional burden rather than a wise investment in the future.

Misplaced priorities

A common misconception is that life insurance is a luxury reserved for the affluent. This belief contributes to the perception that it is not a priority for the average Filipino.

The reality is that life insurance is a versatile financial tool that can be tailored to suit various income levels and financial goals.

Trust issues with insurance providers

Trust is a critical factor in any financial decision, and Filipinos, at times, express reservations about the credibility of insurance providers. Concerns about claim settlements, complex policies, and the fear of being deceived can create a barrier between individuals and life insurance.

Establishing trust through transparent communication and education is crucial in overcoming this challenge.


Lack of financial literacy

A significant percentage of the population lacks sufficient financial literacy, which leads to a limited understanding of the benefits life insurance can offer.

Many Filipinos are not aware of the diverse life insurance products available—such as whole life, term life and variable life insurance—each catering to different financial needs.

Why this reluctance is detrimental

Financial vulnerability

The absence of life insurance leaves individuals and their families financially vulnerable in the face of unexpected events such as illness, disability, or the untimely death of a breadwinner.

Life insurance acts as a safety net, providing financial support during challenging times and ensuring that the family’s future is not compromised.Missed investment opportunities

Life insurance is not merely an expense; it can serve as a powerful investment tool. Many life insurance policies offer cash value accumulation, providing a source of savings and potential investment growth.

Neglecting life insurance means missing out on opportunities to build wealth over time.

Legacy planning ignored

Life insurance goes beyond personal benefits; it plays a crucial role in legacy planning. Without adequate coverage, the financial legacy an individual could leave for their loved ones is jeopardized.

This lack of foresight may hinder the continuity of financial stability for future generations.

Dependency on government support

Relying solely on government support for financial security is risky. The limitations of government programs can result in inadequate coverage, leaving families exposed to financial hardships. Life insurance provides a private and customizable solution to supplement government benefits.

Addressing the reluctance of Filipinos toward life insurance requires a multifaceted approach. Education and awareness campaigns can dispel misconceptions and enhance financial literacy.

Insurance providers must prioritize transparent communication to build trust with potential policyholders.

Understanding that life insurance is not a luxury but a fundamental aspect of comprehensive financial planning is crucial. Filipinos need to recognize the long-term benefits of life insurance, ranging from financial security to investment opportunities and legacy planning.

Breaking the cycle of skepticism requires a collective effort from insurance providers, financial educators and the community. As Filipinos start to perceive life insurance as an empowering tool for financial stability, they can unlock a future that is secure, resilient, and filled with possibilities.

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Randell Tiongson is a registered financial planner of RFP Philippines. To learn more about financial planning, attend the 106th RFP program this March 2024. Email [email protected] or visit

TAGS: Life insurance, Money Matters

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