Importance of Life Insurance and Health Insurance

For Life insurance, you need to cover 3 areas if applicable:

1) Critical -Death, Total & Permanent Disability, Critical illnesses

2)Disability Income

3)Medical (Hospital & Surgical)

Buying insurance is to buy a sum of money that one will recieve if anything unfortunate happens to one. It is to alleviate the finanicial loss.

To ask if it is neccessary, ask yourself if you or your dependant can afford a $XXXX amount if any happens to you:

Eg A [1) Critical ]: if one has suffer from critical illness, i) he needs to fork up medical & other fees not payable by medical insurance, ii)he still need to provide his depedents living expenses/lifestyle for next X no of years, iii)any other cost eg loans. If the total $$ he calculated from i), ii) & iii) is $300000 and he only has total of $80000 in ready assets and insurance, then he and his family might have finanical problem on top on emotional problem if critical illness happens to him.

Eg B [2) Disability Income], what if one is partially disable and he is not able to claim a single cent from his typical life insurance [1)Critical] Now his salary drop 50% because of his disability. Can he and his dependent able to afford the 50% drop?

Eg C [3) Medical] If one goes for hospital for whatever reason and the medical comes up to $30000, if you afford?

One might not need insurance if he has already a significant amount of asset eg, he has $1 million net and to buy $100000 insurance for protection is not practical.

Another eg. If one is near retirement age, buying disability income is also not practical.

Every life insurance company has its strength and weakness. This year A company might be good in A product, but next year B company might be better in A product after its product revision.