Do I really need Personal Insurance in 2024?

Key Takeaways:

  • Understanding different insurance types is crucial for financial protection.
  • Life, health, long-term disability, and property insurance are fundamental.
  • Each insurance type serves a specific purpose, guarding against various financial risks.

What are the different types of insurance you should consider?
The essential types of insurance to consider for comprehensive financial protection include life insurance, health insurance, long-term disability insurance, and property insurance. Each type addresses specific risks, ensuring you and your assets are safeguarded against life’s uncertainties.

Insurance acts as a safety net, shielding you from financial loss due to unforeseen events. It’s not just a policy; it’s a strategic plan for risk management across life’s many domains. Whether it’s the stability offered by life insurance, the health coverage for medical emergencies, the income security provided by long-term disability insurance, or the protection of your property, each insurance type is tailored to offer peace of mind and financial security, allowing you to live life with confidence.

One of the most evergreen questions that every generation in Singapore will ask themselves, Do I really need Insurance? Let’s just for once and for all, quell all myths and doubts that are around personal Insurance.

Most common questions answered

What is Insurance?

Insurance is an amount of money you pay on monthly, quarterly, half-yearly or yearly instalments that protect you and your property in case of any damage (property) or death (person). A personal generally gets paid a lump sum when they claim Insurance. It’s just a protection for unforeseen circumstances as well as predictable circumstances. In case of your death, your family will get paid a lump sum of money and that is called life insurance.

What is Personal Insurance?

A lot of people think that personal insurance is life insurance. Life insurance is a component of personal insurance. Personal Insurance consists of Life Insurance, Income Insurance, Critical Illness, Total and Permanent Disability Insurance. So personal insurance is insuring yourself and your family from the impact of an inevitable death, or a loss of job, or a dangerous illness or a disability.

Why do I need Insurance?

Insurance is basically preparing yourself and your family for the future. Insurance is to make sure that you or your family is not financially dented because of any untoward happening. Insurance is comparable to that net that trapeze artists have in the circus. If they fall, they are still protected.

The signs of a good and bad Insurance agent

insurance agents

How pushy they are

This is a simple rule that makes or breaks your deal. If you insurance agent is just too pushy and trying to sell you anything that they can get a commission for, then you got the wrong guy. An agent should look out for your best interest and suggest the appropriate plans. Being too pushy may mean that they are in it just for the money. An Insurance decision is big and it cannot be rushed because the financial stability of a person and a family is dependent on it.

Understanding your situation

A good agent will want to know who you are, about your family, about your lifestyle, the ages of your children, any health problems you have and so on. Insurance is very specific and there are many plans catered to different people at different ages. There is no one solution for all. If your insurance agent is not interested in knowing about your situation thoroughly then this person may not be the right person to consult for your Insurance needs. Many good agents actually present or pitch a particular policy based on your needs. They convince you by showing you cases and examples as well as the financial load on you.

After sale services

This is a clear telltale sign of a good agent or not. The bad insurance agents will just try to get you to sign up for the maximum policies as possible and they go missing after that. These kind of agents sell you the maximum policies up front and they don’t check up on you, or remind you during your renewals, or ask you to change your policy because of your changing situation. So don’t go immediately buying many policies from one agent in one shot.

Knowledge about Insurance

This is very obvious, but not a people look out for this. An agent who has been there and done that has a very good idea of all the policies and all the terms. Insurance isn’t too straightforward and there are small terms and conditions that can considerably change the face of a particular policy. If you pose questions, the agent should be able to give you solid answers that make sense to your situation.

Personal Insurance Schemes you should be aware of

Life Insurance

This is the Insurance of your life. It’s never a guarantee that we will die of natural causes when we are 80 years old. Life is very unpredictable. To protect your family from financial burden you get Insurance on your life. It’s the best thing you can do for your family.

Critical Illness

Critical Insurance is a kind of a living insurance. When you are diagnosed with a critical illness like Heart Disease or cancer you would be able to get a lumpsum. A critical illness can take a huge toll on a person and their family. They can be bed ridden without pay for months on end and the medical bills can add up and be a huge expenditure which might require selling off assets that can be a huge burden on a family. To avoid this, a critical illness cover can benefit the family of the insured who can get reimbursed for medical bills, treatment, nurse expenses and more.

Income Insurance

Not a lot of people are aware of this kind of Insurance. Income insurance is the Insurance that covers you where you are temporarily unemployed due to an Illness or an accident that has you incapacitated briefly. You get paid your wages as well as any mortgages that you have in that period.

Disability Insurance

This kind of Insurance is mostly for blue-collar workers who have Insurance in the case of a disability that has incapacitated them completely and they are never to recover. If you require your body to be completely fine to work, then a disability that stops you from performing your tasks will be covered under this Insurance.

Under Insurance vs. Over Insurance

This is another under-rated topic in the Insurance space. You need to get the right amount of Insurance for you and your family. Under Insurance is a big problem in the Industry because the person who is getting insured does not cover themselves completely or do not get a policy that covers them to the full extent. What happens in this case is there will be a lot of out of pocket expenses during the time of the claim, which can be a huge dent of the finances of the Insured. Just for a few dollars more a month, the person at the time of a calamity can have the least amount of expenses from their own pockets. Over Insurance is when agents try to push a person to get too much insurance that they do not need! This also does not help because there’s a limit up to which one can get covered and over insurance is paying extra for no real benefit.

After reading all this, I hope we’ve convinced you the importance of Insurance and why you need to get personally insured.

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