What Kind Of Insurance Plan Should I Be Considering?01 Feb 2021
Insurance exists to protect us financially from unforeseen loss or damage.
There are various types of insurance plans in the market for different purposes, but many do not have a clear understanding of the plans they purchased, and end up with too many policies or policies that are not right for them.
When you are planning your insurance portfolio, the most important factors to keep in mind are your age, income, lifestyle and number of dependents. These will help determine the types of plans and amount of coverage you need.
You certainly do not need every type of insurance out there, but you should consider the following types to be included in your financial protection plan:
Source: The Simpsons
The greatest benefit of a life insurance policy is its ability to provide for those you leave behind, should the unexpected happen.
If you have financial dependants (eg. parents, spouse, children), your life insurance will serve as a safety net for your loved ones by ensuring that they can cover your funeral expenses and continue paying the bills.
In general, there are two types of life insurance: term and whole life.
A term life insurance covers you for a set period (eg. 20 or 30 years). It is the most basic policy and the least expensive, as it provides no cash value. However, the monthly premium increases with age.
A whole life policy covers you for life (typically up to 100 years old). It costs more due to its cash value that is accumulated over time and paid to you once your policy ends. For certain plans, your monthly premium remains the same, even as you get older.
2. Endowment Insurance
This is a protection plan which also doubles as a savings plan, allowing you to save for retirement or fund your children’s education. You’ll receive a guaranteed lump sum once your policy matures. And if the unthinkable happens to you, your loved ones will receive the sum assured.
3. Investment-linked Insurance
Investment-linked policies (ILPs) are similar to whole life insurance but include an investment component where part of your premiums will be invested in the funds of your choice. An ILP also offers a cash value which you can withdraw during your policy term or, cash out when your policy ends. The cash value amount will depend on how well your chosen funds perform.
Source: The Simpsons
With healthcare costs continuing to rise every year, medical insurance has become a necessity. We can never predict when accidents happen or an illness strikes. So when you or a family member get injured or fall sick, having a medical policy will help ensure you and your loved ones have access to adequate and timely medical care.
The more common types of medical insurance include:
- Medical and Hospitalisation - This provides coverage for expenses incurred during hospitalisation due to injury and illness. It usually includes cashless and hassle-free hospital admission.
- Critical Illness (CI) - A CI policy pays you a lump sum upon diagnosis of any of the 36 critical illnesses, which include cancer, heart attack, stroke, Alzheimer’s disease, Parkinson’s disease, blindness and kidney failure.
- Hospital Income Insurance - This policy protects you from income disruption by paying you an agreed amount of cash on a daily, weekly or monthly basis when you are hospitalised.
- Women-Only Insurance - This type of policy covers women-specific illnesses or events such as breast cancer, ovarian cancer and pregnancy, which are not covered by regular medical plans.
The above insurance plans are arguably the most important out of all the types of insurance in the market. Everyone needs insurance, and protecting our loved ones is always a priority.
Gibraltar BSN offers a range of policies for all the above insurance plans. Check them out here.