You Are Already Insured!

We shall examine three statements.

Statement 1: You are already insured, whether you buy insurance or not!

Statement 1 may sound odd, but there is some truth in it. Read on…

Statement 2: Insurance is a contract concerning time and money. When you do not have the time, the contract will pay your family the money. When you do have the time, the contract will pay you the money. Therefore, insurance is a financial security contract.

So, either way you are secure.

However, if you do not have an insurance policy, there is no contract. Therefore, Statement 2 has to be re-worded as below.

Statement 3: If you do not have an insurance contract, you have to be self-reliant. When you do not have the time, you yourself will have to pay your family the money. When you have the time, you will pay yourself the money. Therefore you will have to ensure your own financial security.

This means you have to save enough money for your family and yourself so that you are able to handle the following situations:

1. Living too long or Living far longer than you imagine – planning for a lengthy retirement

2. Living death or Protracted death – protecting your loss of income due to injury, sickness or critical illness

3. Dying too soon – protecting your family against financial loss due to premature death

4. Children’s future – planning for your children’s educational funds

5. Wealth creation – saving and investing towards more comfortable living

To sum up, if you have insurance coverage, the insurance company will assist you to meet the five needs mentioned above, because you have transferred your risks to the insurance company. The insurance company charges you a premium which is usually about 2 to 3% of the sum insured annually. Otherwise, you have to insure yourself by covering 100% of these costs yourself. You can then say you are fully insured either way.

The choice is yours!