05/03/2025
Why is insurance a difficult business in a poor country?
Don't the poor need insurance more than the rich given their vulnerable and precarious states?
It is a well-established fact that the poorer the person, the more shortsighted his decisions will be.
Why?
Because the brain is hardwired to guarantee survival.
It can't concern itself with the future if there is a threat to its survival today.
When I'm worried about today's meal for myself and my kids, you can't talk to me about a future I can't even imagine.
Sheds perfect light on why, a poor person when given a choice between getting for free a 5 peso cup of coffee now or an insurance policy that costs 10,000 but whose benefit will yet be realized in the unforeseen future, will almost always choose the cup of coffee.
Poverty today annihilates any thoughts of the future in logical terms.
Gains over the long term is something the impoverished brain is unable to process or conceive.
Instead, what gets through to them is the promise of instant relief, be it in the form of a dole out or low interest, easy term credit.
The same credit that will sink them further into the mud of poverty. It's a cycle we need to break.
Poverty does things to the human brain. The same brain in turn determines all perspectives, beliefs, attitudes, behaviors and actions.
The poor make bad decisions not because of a lack of character but because of a lack of cash.
They need help. Compassion. Opportunities. A measure of security today in a scary world.
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Edited version. Original from Sir Jong Merida.