Key Life Insurance Needs 101
Bah. Gastric yet again in the middle of the night. Been going on for past week or so already. I better see the doctor again for medication.
Anyway, I've been thinking of writing a brief guide, especially for family and friends, on how to determine what life insurance you need and its relative priority between different coverage. The best person you should ask would be an independent financial advisor (not agents who are tied to only an insurance company) who is competent and truly have your interest at heart...which I admit is very difficult to find. The next best thing is to educate yourself and DIY.
The type of coverage everyone should consider are as follows:
(1) Hospitalisation & Surgical ("H&S")
(2) Disability Income ("DI")
(3) Critical Illness ("CI")
(4) Total and Permanent Disability ("TPD")
(5) Death
(6) Partial Disability
The key to determining whether you need it or not is to ask yourself this: should anything to happen to you (death, disablement, hospitalisation etc), will be any loved ones who suffers great financial difficulties because of that? If yes, then you need it.
So for those of you who do not have anyone financially dependent on you, then you do not need death coverage.
Only exception is that you're expecting some people to depend on you financially in future (easiest example is children). In this case, you need to determine whether your risk profile is such that if you wait till you have those dependents in future and then only you try to get death coverage but you're either denied (unlikely) or the premium you need to be is loaded (possible) due to your risk profile, then you may want to consider getting it now. Personally, it's too much hassle to think that way and so simpler to consider the situation now but you have to bear in mind the risk you're taking here of course.
Think I better get back to bed. I'll talk about each of the above coverage in subsequent posts, especially touching on common perceptions.
Anyway, I've been thinking of writing a brief guide, especially for family and friends, on how to determine what life insurance you need and its relative priority between different coverage. The best person you should ask would be an independent financial advisor (not agents who are tied to only an insurance company) who is competent and truly have your interest at heart...which I admit is very difficult to find. The next best thing is to educate yourself and DIY.
The type of coverage everyone should consider are as follows:
(1) Hospitalisation & Surgical ("H&S")
(2) Disability Income ("DI")
(3) Critical Illness ("CI")
(4) Total and Permanent Disability ("TPD")
(5) Death
(6) Partial Disability
The key to determining whether you need it or not is to ask yourself this: should anything to happen to you (death, disablement, hospitalisation etc), will be any loved ones who suffers great financial difficulties because of that? If yes, then you need it.
So for those of you who do not have anyone financially dependent on you, then you do not need death coverage.
Only exception is that you're expecting some people to depend on you financially in future (easiest example is children). In this case, you need to determine whether your risk profile is such that if you wait till you have those dependents in future and then only you try to get death coverage but you're either denied (unlikely) or the premium you need to be is loaded (possible) due to your risk profile, then you may want to consider getting it now. Personally, it's too much hassle to think that way and so simpler to consider the situation now but you have to bear in mind the risk you're taking here of course.
Think I better get back to bed. I'll talk about each of the above coverage in subsequent posts, especially touching on common perceptions.
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