Know your Insurance what Insurance do you need what Type of Insurance

There are many types of insurance plans that cover for different type of risks or offer different type of benefits, so for any person out in the street, who is not trained in areas of insurance, how do you know what insurance do you need?

Let’s explore in this article by looking at what concerns most people have, but do note that the negative aspects of the plans are not discussed as every individual is different when it comes to planning for insurance:

1. You Have Concerns Against Premature Death and Permanent Disability

If you have concerns against premature death and permanent disability, most likely, you are afraid of being a liability to your loved ones. And to get yourself covered in this area, you can basically look into Protection Plans like Whole Life Insurance, Investment-Linked or Term Insurance. So which one to choose?

– Whole Life Insurance

This type of insurance usually comes with profits from the insurance companies, in other sense, there’s some conservative savings factor included in as well. So if you are one that would like to get some protection benefits and yet do up some savings in a conservative manner and tend to hold the plan in a longer time frame, whole life insurance plans would be your choice.

– Investment-Linked Plans

This is another type of insurance that generates profits from investment funds. As compared to whole life insurance, the returns are generally higher in the long run but definitely come with more risks throughout. If you are someone who is quite versed with investment instruments, then investment-linked plans would be your choice.

– Term Insurance

As compared to the above three, this is a plan that generates no profit returns. Purely protection benefits if there’s any claims. If you survive throughout the policy term, the coverage usually ceases and you get nothing back. If your main concern is basically on protection or for short term, e.g. covers against a loan, then this plan will be the most suitable. For the same sum assured, term insurance offers the lowest premiums.

2. You Have Concerns Against Facing Any Hospital Bills or Critical Illnesses

– Health Insurance

For concerns like hospital bill coverages, you would definitely need a health insurance. Most health insurance plans would have some form of deductible and co-insurance in their main plans and also additional riders to waive off such requirements and provide additional benefits like cash or recuperation benefits.

To choose which plans, you have to know your affordability and the type of benefits that you need. Discuss with a qualified Financial Planner, share your concerns and preferences, and understand the plans being offered. Most importantly, know the limitations and exclusions and you will be able to choose your plan well.

– Critical Illnesses

If you have such concerns, you can usually include this coverage under the plans as discussed in Concern #1 as a rider, or as part of the main plan for additional premiums. If this concern is not part of the concern against Death or Permanent Disability, you can always opt for a standalone plan.

3. You Have Concerns Against Facing With Any Accidents

Injuries from accidents can be treated with those medical clinics or from hospitals. And to ensure that you are adequately covered in this area, you would definitely need a Personal Accident Plan and/or Health Insurance

Personal Accident Plan offers benefits like medical reimbursements for treatments rendered by clinics or from hospitals but usually up to a certain limit per year.There’s also benefits like lump sum payment if the accident resulted in premature death.

4. You Want To Have Grow Your Savings

To grow your savings, you would need to understand your risk appetite as this would usually determine the plans to choose – Endowment Plans, Investment-Linked Plans or Unit Trust Investments.

Endowment Plan is usually for those who are very conservative in terms of risk appetite in sense that they have some form of guarantees from the insurance companies and with projected returns to look forward to. Do note that there are basic insurance coverage against Death and Permanent Disability provided.

Unit Trust Investment is for those who understand investment risks and are willing to accept. Your savings will grow through the performance of the unit trusts you are buying into. Usually such plans will not provide any insurance coverage.

5. You Want To Protect Your Property And Contents

Depending on the natures of your contents – your residential property or your antiques. These can usually be insured against plans like home and fire insurance to protect the contents within the house against theft, fire and even flood.

If you own precious contents like antiques, this can also be insured against by looking Content Insurance that will appraise the value of your content and devise an individual insurance plan for that item.

So, at the end of day, knowing what insurance you would need would much depend on your concerns. As long as you can know your concerns, there’s definitely some form of insurance for it!