28/02/2020
Insurance as an escape.
I'm sick of Financial Advisors scaring and guilt tripping people into buying life insurance.
"May kakilala ako na di ako pinansin dati tapos ngayon may cancer na"
"Wala ka pa rin insurance? Ingat!" *insert John Loyd Cruz meme*
They're not wrong. Not having insurance can have dire effects. But they're not helpful either.
Although I can't blame those Financial Advisors, once in my career I tried that "marketing strategy" too. But one statement from a friend who is not a Financial Advisor changed my whole perspective about life insurance.
"Nung nakuha ko yung una kong insurance, parang nabawasan yung takot ko."
"Nabawasan yung takot?", I thought to myself. What does that even mean?
Then I tried as hard as I can to look back to the time I got my first insurance plan when I was just 21 years old.
He was right. Nabawasan yung takot ko sa pagtawid ng pedestrian lane. Nabawasan yung takot ko sa mga rides involving height (I have fear of heights, malala). Nabawasan ba yung takot ko mamatay?
Not really just that. Nabawasan yung takot ko sa mga bagay na nakapaligid sa akin.
If you do a 5-minute scroll through your Facebook feed, what will you see? There is a viral outbreak, impending wars, ongoing wars, burning forests, crashing markets, and things that are volatile, uncertain, complex, and ambiguous, or VUCA, as told by Warren Bennis in 1987.
Warren Bennis was right in 1987 but we didn't care that much. We didn't know what was happening in the opposite side of the planet. But now we do because of social media. The VUCA world has amplified effects on our perspectives.
Does life insurance have to do anything with this?
Life insurance gives policy owners certainty in the midst of the world's uncertainties.
What are the things most frequently mentioned in the news today? Just three things; health threats, life threats, and economic/financial market threats.
Guess what? These are also the three main things covered by an insurance plan. An insurance plan gives its policy owner financial coverage on health threats, death, and market crashes especially for plans with guaranteed cash values.
Also, here's an excerpt from a study by California State University in 2017:
"... But they also found that those who had no health care coverage scored 16 percentage points lower on life satisfaction than those with health coverage—a significant difference in happiness."
Just being covered, without having claimed benefits yet, already has a positive effect on a person's happiness.
Are these all just coincidence? I personally don't think so.
Many argue that insurance is the FIRST EVER formal concept in finance and economics. Some even say it's a pillar where finance and economics are built upon.
Since the beginning, we humans have been looking for a way to create some form of certainty in a very uncertain world.
So do I think that insurance is an escape? That's what I thought at first.
But I now think that insurance is one of the ways to REALLY take on the adventure that is called life. - CTTO Ian Dilla
