23/09/2025
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Many businessmen view insurance premiums as a โdead expenseโ because, unlike investments or business ventures, insurance doesnโt directly generate cash flow or visible returnsโespecially if no claim is made. From a purely profit-driven lens, it feels like money leaving without coming back.
But this perspective misses a deeper point:
1. Insurance is risk transfer, not investment.
Businessmen often calculate ROI on every peso spent. Insurance, however, isnโt designed to earn, but to protect. It transfers catastrophic risks (illness, disability, death, property loss) that could otherwise wipe out not just returns, but the business itself.
2. It protects future cash flow.
Without insurance, an unexpected event could force liquidation of assets, diversion of business capital, or even bankruptcy. Insurance ensures that the business and family legacy are not derailed by one disaster.
3. It buys peace of mind.
Many entrepreneurs underestimate the value of focus. Without insurance, every health scare, accident, or economic shock could weigh heavily on decisions. Insurance lets them move boldly, knowing their worst-case scenarios are covered.
4. It can still create financial value.
Some insurance products (like VUL, whole life, keyman insurance, business continuation policies) can actually generate returns, tax advantages, or estate planning benefits. Even if they donโt match pure investments, they provide strategic financial leverage beyond numbers.
Insurance may look like a โdead expenseโ if you measure it only by immediate profit. But in reality, itโs like paying security guards, lawyers, or fire alarmsโitโs a necessary cost of protecting wealth and ensuring survival, which indirectly preserves and amplifies returns in the long run.
