FINANCIAL STABILITY CAN BE HARD TO RECOVER WHEN LOST THROUGH TRAUMATIC AND UNEXPECTED EVENTS. EVENTS SUCH AS SUDDEN DEATH AND NATURAL CALAMITIES CAN AFFECT A FAMILY’S SOURCE OF INCOME BY HAVING THEM PAY FOR THE DAMAGES TO BE RECOVERED.
In order to avoid financial instability from these events, it’s always a good idea to have an insurance plan in hand in order to successfully regain what the family has lost.
Although insurance plans can be useful, most of these plans can be pricey. A regular insurance plan may cost an average of P18,000 and not many can afford that. In order for everyone to be able to afford insurance, the Department of Finance introduced “microinsurance.”
The month of January is dedicated to the success of this product in the Philippine setting. Thus, its significance is worth knowing about. This product may help you or your family in the case of any unexpected event.
What is it and how does it work?
According to a YouTube video uploaded by the late Department of Finance Director Joselito Almario, Micro Insurance, is described as “the provision of insurance products and service that meet the needs of the low-income sector for risk protection and relief against distress and misfortune.”
In other words, microinsurance works the same way as a regular insurance plan, but on a smaller scale. A regular insurance plan costs about P 18,000 a month. This plan is expensive compared to a microinsurance plan which can cost about P40 for four months. This is a much more affordable investment for those who cannot shell out too much money on an insurance plan.
In addition to it’s being affordable, it is also accessible. Finance services such as “Cebuana Luhiller” and “M Luhiller” offer some microinsurance plans that cover accidents, fire, life, and health. These plans also have a maximum beneficiary limit of about 15,000- 20,000 pesos.
Who can avail?
Anyone can avail for a microinsurance plan because of its affordable price tag and accessibility. This can be useful for those who work in the low income sector (jeepney drivers, farmers, etc.) and newly graduated college students.
The low income sector in the Philippines only receives an average income of about P6,000 a month according to the Philippine Statistics Authority. This doesn’t necessarily help them when a large amount of money is needed as soon as possible. Microinsurance is in fact targeted to those who are part of the low income sector. This helps them keep the money that they earn and not shell out too much on medical or home rebuilding bills.
However, microinsurance is not just for the low income sector. Students who just graduated from college and are looking to have their own insurance plan can start with this. This way, they can stay insured without being bothered about paying for an expensive plan along with other expensive things they must play which include their electricity bill and the rent for their apartment.
This can be a good starting point until they have enough money to pay for a more premium insurance plan.
Why is it significant?
As mentioned earlier, microinsurance is not only a convenient plan but a helpful one as well. During Typhoon Yolanda back in 2013, about 100,000 microinsurance beneficiaries have been aided within the first three months. This was one the times microinsurance was needed. This was also where it started to show its popularity.
The Philippines has already made 31 million Filipinos get affordable insurance plans. Because of this, the country, along with India, has been recognized by the world as one of the few countries that offered this kind of insurance plan according to microisurancenetwork.org.
In honor of its success, President Gloria MacapagalArroyo signed Proclamation 1212, s. 2007 recognizing January as the “National Micro Insurance Month” in 2007. According to the proclamation, “all concerned government agencies instrumentalities…are hereby enjoined and encourage to initiate and participate in relevant and meaningful activities…” Activities would include training programs such as the 2012 Training on Micro Insurance Advocacy, and Advocacy seminars.
Microinsurance is a plan that has proven to be successful when it comes to its target clients. If only the government could give attention and aid to this idea, then most if not, all Filipinos won’t have to fear for their health, families, livelihood, education, and community anymore than they already do. Filipinos should have somewhere to rely on when things get worse and microinsurance surely will be of great help.