Sachet insurance plans attract more Filipinos

CEBU, Philippines - The Philippines robust "sachet economy" is not only helping retailers of consumer goods, but now it is also being adapted by financial literacy advocates in a bid to draw more Pinoys to save.

Today, with as low as P50 per day, an ordinary earner can already buy an insurance or financial protection product, said Irena Leica S. Cruz, PhilAm Life agency manager in Cebu.

Adapting the sachet concept is one of the reasons why insurance products in general are becoming part of every Pinoy's budget plan, particularly among the young professionals, said Cruz.

According to Cruz, there is a need for financial consultants, across insurance firm affiliations to further educate the Philippine market on the affordability of investment funds, like insurance, and at the same time shift the culture of debt-dependency to financial independency.

Philam Life for instance, Cruz said is constantly advocating for affordability and customization of financial planning, which already include a savings of P50 a day to get an insurance premium.

The "sachet concept" presentation on insurance premium although is something novel, it catches the attention of Pinoys.

In the Philippines, big profits come in small packages – from cigarettes sold by the stick to little plastic packs of pepper.

A recent Synovate Global Omnibus study revealed that nearly 90 percent of Filipinos buy items in sachet sizes, including non-food goods such as shampoo (90 percent), toothpaste (47 percent) and detergent powder (13 percent). This archipelago has become one of the world’s biggest markets for goods sold in small quantities, earning itself the nickname, the ‘sachet economy’.

This time, insurance products also come in "sachet" packages or customize plans, to adjust to the market's behavior, Cruz added.

Although financial literacy movement has been intensified in the Philippines by major insurance players for years now, a recent study showed that only 16 percent of the over 100 Filipinos are financially prepared for future expenses, such as illness.

When it comes to education, only 230 out of 1.000 Filipinos who started grade 1 will go to college.

Although, the younger market has already recognized the importance of wise financial management at the early age, Cruz said the introduction of sachet insurance fueled the interest of Pinoys to allocate a daily budget cheaper than a cup of Starbucks coffee, if only to protect their future. (FREEMAN)