IC plans micro-insurance pre-need program

The Insurance Commission (IC) is planning to launch a pre-need microinsurance program this year to encourage poor families send their children to vocational schools.

Insurance Commissioner Emmanuel F. Dooc, said that the planned micro pre-need program aims to help poor families including contractual employees who do not have a steady stream of income.

“We hope to launch a micro-insurance pre-need program, hopefully within this year because pre-need also needs a similar initiative to prick up the industry,” Dooc told reporters.

The insurance commissioner also said that they have already consulted with the pre-need industry regarding the proposed program.

“We there’s still future in microbusiness, that’s why we would like to expand it to micro pre-need and the pre-need industry is also enthusiastic of doing the micro version,” Dooc said.

“Maybe it can provide educational benefit to enable poor families send their kids to vocational schools,” he added.

He also said pre-need companies may also sell mini-pensions designed for seamen whose contract is limited to nine months or a year, but could guarantee at least 1,000 monthly pension once the individual reached the retirement age.

“If they [contractual employees] buy unitized pension plans, they can accumulate 10 units which pay them 1,000 per unit when they reached 60 or 65 [years old], so that’s even better than their SSS [Social Security System] benefit,” Dooc said.

He is also confident that micro pre-need will be a success once implemented like other micro insurance products that they had introduced to the local market, citing about 30 percent of people in the Philippines are now covered by microinsurance.

“What makes that happen is the fact that you have insurers that recognize the low-income market as an important market,” Dooc said.

“You have regulators and policymakers, you have people who are interested in trying to help low-income people protect themselves, and provide the products that they need. So the coordination of all these groups has really provided a tremendous result here in the Philippines,” he added.

The Philippines is touted as leader in the microinsurance field in AsiaPacific as more than a third of the 66 million people in the region covered by microinsurance are in the Philippines.

Despite the country’s leadership, microinsurance distribution, especially to the low-income segment, remains a work in progress.