Striking the perfect balance between life and non-life insurance

With almost a decade of experience handling clients and training financial advisors, Peter Torres, a two-year MDRT member from Taguig City, Philippines, has observed a prevalent trend. When it comes to insurance, Filipinos prioritize non-life over life coverage. “For many Filipinos, property represents a significant portion of their wealth. Protecting this wealth is perceived as more critical than planning for future uncertainties like death or illness.” As a result, life insurance is often less prioritized, leading to significant gaps in overall protection and financial security. 

“This prioritization of property over life insurance can be attributed to the lack of mandatory requirements for the latter.” There are mandatory non-life insurance requirements for properties in the Philippines, such as the Compulsory Third Party Liability (CTPL) insurance policy for motor vehicle registration. The immediate and visible benefit of non-life insurance makes it more attractive. On the other hand, Torres tackles the common Filipino mindset of life insurance as an unnecessary expense. The cost of life insurance is a deterrent for many Filipinos, especially those with lower income. 

Coming from a humble background, Torres understands this sentiment. His journey into financial advising began as a venture to support his family. He dabbled in various businesses, from a water refilling station to a trucking service, before leveraging his background in aquaculture to start a farm and fisheries technology business. His knack for sales and business acumen eventually led him to financial advising, where he found a unique calling.  

Torres built his client base by tapping into his growing business network and joining community-based organizations. “As a financial advisor, I would prospect the farmers and farm owners I meet through one of my businesses.” He handles over 20 financial advisors and services over a hundred clients composed of entrepreneurs and professionals. “Since I’ve had to juggle managing my businesses and side hustles, realizing my financial advising goals took quite a while. Even though I joined the profession in 2015, I only achieved MDRT status two years ago.” 

For Torres, much of his work involves challenging Filipinos' tendency to deprioritize life insurance. He integrates education into client meetings and consultations, emphasizing life insurance's long-term benefits and financial security. He explains how life insurance complements non-life insurance plans, offering comprehensive protection for life and property. This approach aims to reassure clients and instill confidence in their financial planning. 

Torres often illustrates this point by using car insurance. “If a car meets an accident, the car is protected, but not the people inside.” This stark example underscores a critical point. While properties and vehicles are often insured, those who own and use them frequently are not. This oversight leads to devastating financial consequences in the event of personal injury or death. 

Torres shares the story of a client from a low-income family who managed to invest in a property through diligent saving. They had a thought-provoking conversation about the importance of life insurance. “What are you doing to protect this property you worked so hard for?” It made the client realize the need to safeguard her assets. After securing property insurance, he highlighted the importance of life insurance. “Now that your property is protected, you must also protect the people residing there.” The rationale resonated with the client, who eventually purchased insurance for her whole family. 

Torres’s successful approach offers valuable lessons: 

1. Ask thought-provoking questions: Don’t shy away from asking questions that make clients consider their vulnerabilities. For instance, Torres’s query about protecting hard-earned property prompted his client to reflect deeply on her insurance needs, leading her to make more comprehensive coverage decisions. 
2. Emphasize the link between life and non-life insurance: It's essential to help clients see the interconnectedness of different types of insurance. Torres stresses to his clients that natural calamities like earthquakes and typhoons don’t discriminate; they destroy lives and properties. Thus, protecting only one aspect leaves unmitigated risks in other areas. 
3. Educate clients about financial hierarchy: It is crucial to help clients understand the hierarchy of economic priorities. According to Torres, life, and health should be at the top of this hierarchy, followed by material possessions. Education ensures clients make informed decisions, prioritizing their long-term well-being over immediate, tangible assets. 

Striking the perfect balance between life and non-life insurance requires a deep understanding of the client’s needs, proactive education, and the ability to ask the right questions. This approach addresses the need for non-life insurance and bridges the gap to life insurance, providing holistic protection for the client’s life and property.

Contact: MDRTeditorial@teamlewis.com