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Health and Financial Wellness

Study on the impact of the COVID-19 pandemic on health insurance riders

If the COVID-19 pandemic did not happen, what would you be doing today? Most likely, you would be looking forward to your usual night out with friends or a shopping trip to the mall. Maybe you had just been settling into the work week having come from a luxurious weekend vacation out of town. But the more important question is, having experienced the difficulties of the past several months, would you still be hankering to splurge or would you be a bit wiser with your lifestyle choices?

One thing is for sure, this “new normal” has impacted not only our health but also our finances. This is because a massive consequence of the lockdowns and community quarantines implemented across the country was the stoppage of work for many Filipinos. In fact, the country has slipped into a technical recession by the second quarter of the year after its gross domestic product contracted by a staggering 16.5 percent—the sharpest drop ever recorded in more than three decades. Having an emergency source of funds amid the COVID maelstrom has spelled all the difference in terms of survival, and continues to do so.

If there’s anything to take away from all this, it’s the value of prioritization, and the good news is that by some indication, Filipinos—the younger generation in particular—have been making wise decisions with regard to finances especially in terms of insurance coverage. According to the latest research from the AI and Data Analysis Center, the advanced technology solutions division of life insurance provider Pru Life UK, the market for health riders or additional benefits attached to life insurance policies has proven resilient despite the strain on personal finances caused by a disrupted and slowing economy.

The study compared purchases of insurance policies by Pru Life UK customers in the first six months of 2020 with those made during the same period last year. The proportion of health riders among total riders recorded a very mild drop of 0.05 percent, which signifies that despite the unprecedented impacts of the COVID-19 pandemic to the economy and to personal finances, Filipinos remain committed to prioritize and protect their health by buying health riders to supplement their insurance policies.

Compared to older generations, today’s young adults could also be considered as more cognizant of the impact of COVID-19 as a public health crisis and thus, they are taking the necessary steps to protect themselves not only from the disease but from its financial burden.

“This finding validates our assumption that health protection has become a necessity for a growing number of Filipinos, even in these challenging times,” said Pru Life UK President and CEO Antonio “Jumbing” De Rosas.

“The resilience of health protection in the Philippines is in line with the trend we are observing across the region, where health insurance has shown a steady growth in most of our markets despite local lockdown restrictions. This is likely due to an increased awareness of the importance of health protection in facing the pandemic,” added Prudential Corporation Asia Chief Health Officer Andrew Wong.

For De Rosas, “Addressing this reality is a matter of making insurance products more accessible to meet the growing needs. The pandemic has taught us that the mode of delivery is as important as the price for customers. In this respect, our industry has been fortunate in the sense that we have been able to continue with our operations despite unprecedented restrictions.”

Indeed, since March, the Insurance Commission (IC) has issued several landmark rules aimed at relaxing regulations to allow the continued operations of insurers, especially those providing health products and services. One of these rules, which has been extended until the end of this year, authorizes the sale of insurance products through digital tools.

Pru Life UK also established the AI and Data Analytics Center in September to accelerate its digital transformation and to build a smarter business with cutting-edge technologies. The virtual center is designed to drive the integration of advanced technology solutions within Pru Life UK’s business to enhance its delivery of value-added products and services to its customers and the public. The center also provides insights into consumer behavior, how habits and priorities change among Filipinos under various occasions such as the COVID-19 pandemic, and how these events affect the policy management of Filipino insurance customers.

There is perhaps no more excuse not to be financially prepared even as the COVID-19 pandemic rages on. Today is always a better time than yesterday when it comes to saving for a rainy day. The only predicament worse than being sick these days is not having money to spend for treatment and recovery. To invest in your health is to acquire peace of mind, and that alone is  precious and rare in these changing times.

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References:

1. Pru Life UK AI and Data Analytics Center. Study on the impact of the COVID-19 pandemic on health insurance riders. 2020. [cited 14 October 2020].