The Basics of Insurance

Why Insurance is the Quiet Hero of Your Financial Life

Let’s be real: If you’ve ever bought a lottery ticket, you probably knew deep down that you weren’t going to win. But you still played, didn’t you?

I get it. That tiny spark of what if is intoxicating. A few pesos a day for the chance—however slim—of hitting it big? That’s the dream, right?

This is what financial experts call positive skew. You're willing to lose small amounts regularly in exchange for the possibility of a massive payout. It’s not logical—it’s emotional. It’s hope.

Now let’s flip that idea on its head.

Insurance: The Opposite of the Lottery

Insurance isn’t about hitting the jackpot. It’s about not losing everything. Think of it this way: you're paying a little bit now to protect yourself from a financial disaster later. It's not glamorous. You probably won’t post about it on social media. But when life throws you a curveball—like a major illness, car accident, or the loss of a loved one—you’ll be so glad you had it.

It’s not about expecting the worst. It’s about being prepared for it.

Why People Like Us Need Insurance

Here’s something you might not know: the need for insurance comes down to a simple idea called risk aversion. As humans, we naturally try to avoid huge, painful losses—even if it costs us a bit more over time.

It’s the same reason you lock your door at night. It’s not because you expect something bad to happen. It’s because if it ever did, the cost of not being protected would be far worse.

Let’s take home insurance, for example. No one wants their house to catch fire. But if it does and you're uninsured, you could lose your home, your memories, and your financial stability in one go. For a small annual premium, you avoid that risk entirely.

That’s the real power of insurance in your financial plan. It’s not just a bill—it’s peace of mind.

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The 3 Must-Have Types of Insurance for Every Filipino

Here are the core insurance types you need to protect your health, your family, and your assets:

1. Health Insurance

Medical bills can wipe out years of savings in a matter of days. Health insurance in the Philippines helps cover hospitalizations, treatments, and medications. It protects your finances while you focus on healing.

2. Life Insurance

Losing someone you love is already devastating—don’t let it be financially crippling too. Life insurance provides income protection for your loved ones when you pass. It's one of the most selfless decisions you can make.

3. Property and Auto Insurance (Property & Casualty)

This includes everything from your home to your car. Whether it’s a typhoon, fire, flood, or road accident, property and casualty insurance helps you recover without breaking the bank.

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How Insurance Companies Really Work

Let’s pull back the curtain for a second. Insurance companies run on a few key numbers:

• Loss Ratio: How much they pay out in claims vs. what they collect. If they collect ₱1M and pay ₱800k in claims, their loss ratio is 80%.

• Expense Ratio: What it costs them to operate. If they spend ₱120k on admin costs out of ₱1M premiums, that’s a 12% expense ratio.

• Combined Ratio: Add those together, and you get the total outflow. In our example, it’s 92%. That means they keep 8%—not much, considering the massive responsibility they carry.

And yet, people still hesitate to buy insurance. Why? Because the benefit isn’t immediate. But when the storm hits—literally or figuratively—you’ll see just how life-saving it is.

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Final Thoughts: Don’t Wait Until It’s Too Late

You don’t wait to buy an umbrella after it starts raining. The same goes for insurance. The best time to get protected is before you need it.

Whether it’s securing your family’s future through life insurance, shielding your home with property insurance, or preparing for unexpected medical bills with health coverage, your future self will thank you for taking action today.

🛡️ If you’re unsure where to start, I’m here to help. I offer free financial consultations tailored to your lifestyle, your budget, and your goals.

📩 Message me today, and let’s talk about building a financial safety net that actually works. Because real wealth isn’t just about how much you earn—it’s about how well you protect what matters most.

About the author 

Jack Marbida is a  husband to his wife Wene and a father of 2 little boys Isaac and Israel, he is a financial advisor, speaker, and writer who helps families be financially stable and grow their relationships. He works with families to help them reach their goals by teaching them about financial literacy and helping them develop a healthy relationship with money.

He has been featured in Sun Life Financials and others for his work as a financial coach. He is also the founder of Online Advisors Financial Education, which provides free educational content through blogs and videos.

Jack speaks at conferences across the Philippines on topics such as family finances, and personal and professional growth.  

You can contact Jack Marbida through his social media accounts or email him at papajackph@gmail.com.

Cheers!