Walk into almost any Filipino household and ask this simple question:
“Do you have investments?”
You’ll often hear no.
But ask this instead:
“Do you have insurance?”
Suddenly, there’s a long list. VULs, endowment plans, riders, add-ons, and sometimes multiple policies sold by different agents.
This is the strange financial reality for many Filipinos today: over-insured, but under-invested.
And no, this didn’t happen by accident.
Insurance Was Never Meant to Replace Investing
Let’s get one thing straight.
Insurance is protection, not wealth-building.
Its job is to protect your family from:
- Death
- Disability
- Critical illness
- Unexpected medical expenses
That’s it.
Insurance exists to prevent financial disaster, not to make you rich.
Yet many Filipinos are led to believe that buying insurance, especially insurance with “investment,” is already enough.
It isn’t.
How Did We Get Here?
1. Insurance Is Aggressively Marketed as an “Investment”
Most Filipinos are exposed to financial products through:
- Friends on Facebook
- Former classmates turned “financial advisors”
- Free coffee meetups with charts and projections
What do these pitches usually highlight?
- “You’re investing while insured”
- “Sayang kung pure insurance lang”
- “At least may napupunta sa investment”
Rarely discussed:
- High fees
- Long break-even periods
- Underwhelming long-term returns
So instead of learning how to invest, people are taught that insurance is already investing.
2. Fear Sells Better Than Growth
Insurance is sold using fear:
- “What if may mangyari sa’yo?”
- “What if magkasakit ka bigla?”
- “Kawawa pamilya mo pag wala ka”
Investing, on the other hand, requires:
- Patience
- Discipline
- Delayed gratification
Fear is emotional. Investing is boring.
Guess which one is easier to sell?
3. Commissions Shape Financial Advice
Let’s be honest.
Insurance products, especially VULs, pay much higher commissions than:
- Mutual funds
- Index funds
- Bonds
- Government instruments
This doesn’t automatically make insurance agents bad people.
But it does mean that the advice many Filipinos receive is commission-driven, not outcome-driven.
That’s how someone earning ₱25,000 a month ends up with:
- ₱4,000 to ₱6,000 in monthly insurance premiums
- Zero emergency fund
- Zero real investments
The Result: Protected, But Not Progressing
Many Filipinos today are:
- Fully insured
- Emotionally relieved
- Financially stagnant
They are protected against worst-case scenarios, but they are not:
- Growing wealth
- Beating inflation
- Preparing for retirement properly
Insurance prevents you from going backward.
Investing is what moves you forward.
Common Signs You’re Over-Insured
You might be over-insured if:
- Your insurance premiums are larger than your savings
- You don’t have a proper emergency fund
- You can’t explain where the “investment” part of your policy is invested
- You don’t invest anywhere else outside insurance
- You were told, “This is enough, you don’t need other investments”
That last one is the biggest red flag.
What a Healthier Setup Looks Like
A more balanced financial structure looks like this:
1. Protection First (But Only What You Need)
- Term life insurance if you have dependents
- HMO or health insurance
- No emotional overbuying
2. Emergency Fund
- Three to six months of expenses
- Liquid and accessible
3. Real Investments
- Government instruments
- Funds
- Businesses
- Assets that are meant to grow, not just “projected to grow”
Insurance stays in the background, quietly doing its job.
Investments take center stage.
Why This Conversation Is Uncomfortable (But Necessary)
Talking about being over-insured makes people defensive because:
- They already paid a lot
- They trusted someone
- Admitting a mistake feels painful
But personal finance is not about pride.
It’s about correction.
The earlier you realize that insurance is not an investment, the sooner you can redirect your money to things that actually build wealth.
Blogger’s Corner
Insurance should give you peace of mind, not the illusion of progress.
If most of your money is going into policies you barely understand while your savings and investments remain close to zero, it’s time to pause and reassess.
Being insured is responsible.
But being insured and invested is how you actually move forward financially.
Protection keeps you standing.
Investing is what helps you walk, and eventually run.