Do You Actually Need Insurance? Or Is It a Question of When?

I bought my first insurance policy when I was 21.

At the time, I was earning around ₱12,000 gross a month. I was young, curious, and honestly, partly attracted to the idea of becoming an insurance agent myself. I wanted to understand the business. I wanted to learn how insurance worked. And like many young professionals trying to figure out adulthood, I thought buying a policy was one of those responsible things you were supposed to do.

So I bought one.

It was a VUL, which at the time was presented to me more as an investment than as insurance. The premium was around ₱1,500 to ₱2,000 a month. Looking back, that was a lot. On a ₱12,000 gross salary, that was already a meaningful part of my income. After food, commute, daily expenses, and the reality of working overtime without extra pay, the policy was not just protection. It became another monthly pressure.

My parents warned me that I might not be able to continue paying it.

I remember feeling defensive. I wanted to prove them wrong. I wanted to believe that I was being responsible, that I was making an adult decision, that I understood something they did not.

But over time, they were right.

After around six to ten months, the policy lapsed.

What surprised me was that I did not feel devastated. I felt relieved. I no longer had to pay. I could finally enjoy more of the little money I was earning.

That experience taught me something I did not understand then: the question is not simply whether insurance is good. The question is whether you need it now, whether you understand what you are buying, and whether you can sustain it long enough for it to actually protect you.

Insurance Is Not a Badge of Adulthood

A lot of young Filipinos are introduced to insurance before they are introduced to financial planning.

A friend becomes an advisor. A relative invites you to coffee. Someone talks about protection, investment, passive income, or becoming part of the business. Before you have even asked what risk you are protecting against, you are already looking at a proposal.

That is not always bad. Many people first learn about money because someone sold them something. But it can create a problem.

You start with the product before you understand the need.

That was my mistake at 21. I did not buy insurance because someone depended on my income. I did not buy it because I had a child, a spouse, a parent relying on me, or a major debt that would fall on my family if something happened. I bought it because I was curious, because I wanted to understand the business, and because it was sold partly as an investment.

Looking back, I probably did not need that kind of policy at that stage of my life.

What I needed more was cash flow. An emergency fund. A simple way to invest. A better understanding of what I wanted my money to do.

Insurance was not wrong. The timing and product were wrong for my stage of life.

So, Do You Actually Need Insurance?

The honest answer is: it depends.

That sounds like an escape, but it is actually the correct starting point. Not everyone needs the same insurance. Not everyone needs it with the same urgency. And not everyone should buy the first policy they can afford just because it feels responsible.

The better question is this:

If something happens to you, who becomes financially affected?

That is where insurance starts.

If you are gone, who loses income, support, stability, or options? If you become critically ill and cannot work, who pays for your treatment, your bills, your recovery, and your daily life? If your income stops for six months, one year, or two years, what breaks first?

That is the real insurance question. Not "What product should I buy?" Not "How much can I budget monthly?" Not even "Is this a good investment?"

The question is: what financial problem appears when you are no longer able to provide?

When Insurance Becomes Urgent

Insurance becomes more urgent when someone depends on your income.

That can mean a child, a spouse, a parent, a sibling in school, or anyone whose life becomes financially harder if you are gone. In the Filipino context, "dependent" is not always limited to your legal dependents. Sometimes it is a parent you send money to every month. Sometimes it is a sibling whose tuition you help cover. Sometimes it is a household where your income quietly holds everything together.

This is why a single professional with no children may still need insurance. The question is not whether you are married. The question is whether someone relies on you.

Insurance also becomes more urgent when you have major financial obligations. A condo loan, car loan, business loan, or family obligation changes the conversation. Some loans already require insurance, especially property-related loans, but that is different from choosing protection for yourself. Required insurance protects the lender. Personal insurance protects the people and future you care about.

Insurance becomes even more urgent when you have children.

That is probably the clearest case. If a parent dies, the financial question is not theoretical. Who pays for food, school, housing, healthcare, and the life the child was supposed to have?

This is why fear is often used in insurance selling. "Paano ang anak mo kung mawala ka?" It is an uncomfortable question, but it is not an invalid one. The problem is when fear becomes the whole sales method. Fear can start the conversation, but it should not replace planning.

When Insurance May Not Be Step One

On the other hand, insurance may not be the first priority for everyone.

If you are a fresh graduate with no dependents, unstable cash flow, no emergency fund, and a small salary, a large policy may not be essential yet. It is not bad to have insurance if you can truly afford it. But it becomes a problem if the premium eats too much of your income.

At 21, my ₱1,500 to ₱2,000 monthly premium did not look impossible on paper. But in real life, it competed with food, commute, daily expenses, and the simple desire to enjoy the money I was earning. I did not have an emergency fund. I had a few pesos in my wallet and a policy I could barely sustain.

A policy you cannot keep paying is not protection yet. It is a future lapse waiting to happen.

That does not mean you must finish building your emergency fund before buying any insurance. Life does not follow a clean financial checklist. Nobody tells you when you will get sick or when you will die.

But the premium should not be so heavy that it prevents you from building any financial cushion at all.

A better rule is this: while building your emergency fund, you can also buy protection, but only at a level your cash flow can carry.

Why Many Filipinos Delay Insurance

I do not think Filipinos avoid insurance simply because they do not believe in it.

Most people understand the idea. If something happens, money helps. The issue is that we are a country where many households have more urgent uses for cash today.

Food. Rent. Tuition. Commute. Debt. Family support. Medical bills. A small reward after working hard.

When money is tight, the future feels abstract. Insurance competes with needs that are already on the table.

And even when income improves, the temptation is not always protection. Sometimes it is lifestyle. A better phone. Better food. Travel. A nicer place. A little comfort after years of sacrifice.

That is human. It is not always irresponsibility.

But it does create a gap. We work hard to enjoy life now, while hoping the future does not interrupt us too violently.

Insurance is one way to admit that the future can interrupt.

The Product Trap

The most common wrong reason to buy insurance is treating it purely as an investment.

That was part of my own mistake. I bought a VUL at 21 when what I probably wanted was an investment habit. If I had understood myself better, I might have bought a simpler investment product separately and waited until insurance made more sense for my life stage.

Life insurance is not mainly for you. It is for the people who absorb the financial impact when you are gone.

Critical illness and health-related insurance are different. Those are also for you, because you are the one who needs money while recovering. That is why today, I think about insurance differently. In my thirties, I prioritize critical illness because the risk I worry about is not only dying. It is getting seriously sick, surviving, and needing money while my income is affected.

At 21, I did not have that clarity.

Nobody asked me who depended on me financially. Nobody asked about my emergency fund. Nobody asked about my monthly expenses. The conversation was mostly about what I could budget and what the product could become.

That is backwards.

Before asking how much you can pay, the better question is: what are you protecting?

A Better Way to Decide

I do not think insurance should be approached as a rigid checklist.

It is not always emergency fund first, then HMO, then term insurance, then critical illness, then investments. Life is messier than that.

A better framework is to ask:

What future am I trying to build, and what could stop me from reaching it?

If your goal is to build wealth, then you need investments. If your goal is to protect your income, then you may need life insurance or critical illness coverage. If your goal is to avoid becoming a burden during a medical emergency, then health coverage and critical illness protection may matter more. If your goal is to protect your child, spouse, parent, or sibling, then life insurance becomes more urgent.

Insurance is not always the first financial product you need. But it becomes important when there is a future you are responsible for protecting.

What I Would Tell My 21-Year-Old Self

I would not tell him that insurance is bad.

I would tell him to slow down.

Understand the purpose of the product first. Do not buy something because it sounds responsible. Do not buy something because it is sold as an investment. Do not buy something just because a friend is offering it or because you want to prove that you are mature.

Ask what you actually need.

At 21, maybe what I needed was savings. Maybe it was a small emergency fund. Maybe it was a simple investment habit. Maybe it was a cheaper form of protection, if I really wanted one.

At 35, the answer is different. I have more responsibilities, more income, and a clearer understanding of what I am protecting. Insurance now is not about proving adulthood. It is about preparing for risks that my family, my future, and my cash flow should not be forced to absorb alone.

That is the honest starting point.

You do not need insurance because someone scared you into buying it. You need insurance when the financial impact of your death, illness, or inability to earn is too large for the people around you to carry.

The goal is not to buy the most impressive policy. The goal is to buy the protection that matches your stage of life, your responsibilities, and the future you are trying to protect.

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For educational purposes only. Not insurance or financial advice. Consult a licensed Financial Advisor or Insurance Professional registered with the Insurance Commission of the Philippines for personalized guidance.