Insurance is an asset to you? , or debt?

In the past, I didn’t pay much attention to insurance, and I always felt that there was no need to spend money on insurance. If you quote from the book Rich Dad and Poor Dad, “Asset is putting money in your pocket, and liability is putting money in your pocket. “Take it out of your pocket”, at first glance, insurance seems to be a commodity that takes money out of your pocket, because it is invisible, and you spend money just to buy a protection against accidental risks. If there is no accident, or if you rarely get sick and are healthy, but you have to pay insurance money to the insurance company every year, it seems that buying insurance is not so necessary.

But is it really so?

In order to clearly understand whether insurance is an “asset” or a “liability” for me, the first step is to examine what kind of insurance I have now. , and do these insurances really cover me?

I use the insurance passbook service of the Life Insurance Association to check which policies I currently have. The advantage of the insurance passbook is that in the past, when I wanted to check which policies I had, I had to go to the Life Insurance Association’s website to apply and ask them to put what you have on you. The insurance policy will be sent to you, and the insurance passbook is that as long as you register as a member, you can see which insurance policies you have now. Although it is a simplified version, it is basically satisfied to confirm which types of insurance you are insured, and then you can According to the name and insurance type of your policy, go to the Finfo insurance information site to view the coverage of the details of this policy. (Wait about how to use Finfo)

Life Insurance Association’s Insurance Passbook Service. photo credit: Life Insurance Association Insurance Passbook

The insurance passbook service of the Life Insurance Association is divided into two types of members at the time of registration. The first is that ordinary members are free and only provide a basic policy overview, and the second is that platinum members are 100 yuan a year, which is provided in addition to the policy overview. Now, check the policy information and provide a PDF file to download your policy and insurance claims alliance chain/insurance claims medical case application transfer progress inquiry.

Membership level of life insurance association’s insurance passbook service. photo credit: Life Insurance Association Insurance Passbook

I choose the Platinum Membership plan. First, I download the PDF file to help me clarify the key points of my needs in the future policy health check. Second, the policy overview function can only be used to view my policy in the form of a dashboard. There is no legal way to check the items in each policy (the main contract and the attached contract). In order to know the protection content of each insurance policy, it is very important to know the main contract and the attached contract of each insurance policy.

Life Insurance Association’s Passbook My Policy Overview. photo credit: Life Insurance Association

After we have confirmed which policies we have, the next step is to figure out what they cover.

There are six major types of insurance, namely: life insurance, cancer insurance, medical insurance, major injury and illness, accident insurance and disability insurance. The contents of these six types of insurance are also different. Only when cancer is detected can you apply for a claim to the insurance company, but if the insured’s detected pain is not cancer, even if you have a cancer insurance policy, you cannot apply for a claim to the insurance company.

There are six types of insurance. photo credit: Mr Market

Therefore, we can preliminarily classify the insurance policies we have according to these six types of insurance to determine which parts of our current insurance coverage are covered. After classifying the insurance policies, we can further review the content of the insurance policies. This is the part of the covenant and the covenant mentioned earlier.

The main covenant, as the name suggests, is the main covenant, the supplementary covenant is the additional covenant, and some are the incidental items. If you use a locomotive as an analogy, the main covenant refers to the locomotive, and the supplementary covenant is the carriage of the train. Imagine that you are a person today. Train conductor, does it have to have a locomotive for the train to run on the tracks, but if you only have the carriages, he can’t be considered a train and can’t run.

In the same way, the main contract of insurance is like a locomotive, and the supplementary contract is like the carriage of a train. Therefore, when purchasing insurance, you can buy the main contract (locomotive) alone, but you cannot buy the supplementary contract (railway carriage) alone. You need to buy a main insurance contract. Only then can you purchase the additional covenant under this main covenant.

In addition, the insurance rider can be matched or replaced according to your own needs. Just like the carriages of a train, you can add or choose to remove unnecessary carriages. Different models vary, so you can only make matching in the carriages that meet the specifications of this locomotive. Just like the insurance owner’s appointment, depending on the type of commodity insurance, the riders that can be matched and selected will also be different.

After the guys confirm the main contract and the supplementary products of the insurance products, the next step is to check whether the main contract is “lifetime type” or “regular type”. Lifetime type means that you only need to pay within a specific period. After paying the fees required by the insurance company, you can get a lifetime protection, such as a 10-year or 20-year term, and the regular type is that you have to pay the insurance company every year, if each of them does not Pay, and your insurance coverage will become invalid, which is somewhat similar to the concept of a subscription system.

Generally speaking, lifetime premiums are more expensive than regular premiums, because they are designed with the concept of leveling premiums, that is, the insurance company has already allocated the premiums you will pay in the future to the present. Let you pay in advance, and the regular type is calculated by the natural rate, that is, as your age increases, the annual insurance cost will increase, so if the same 30-year-old person wants to buy life insurance, lifetime insurance The insurance premiums to be paid at the age of 30, 31, and 32 are the same for the type of life insurance, while the premiums for the term type of life insurance at the age of 30, 31, and 32 will vary according to your current age.

At this time, we can dismantle the insurance categories just now in detail and divide them into: insurance companies, insurance categories, contract types, commodity names and insured amounts.

Schematic diagram of reference example for insurance arrangement

After we have sorted out and confirmed the insurance products in our hands, the next step is to conduct a health check on the insurance policy.

There are many ways to check the insurance policy, for example, you can post your own policy information to the PTT insurance version, and use the power of the wisdom of the crowd to help you check the content of the policy, or ask an insurance broker for consultation, or just crawl the Internet and do your homework. It is also a method. No matter which method you choose, this part of the policy health check is very important.

If you are an insurance novice and don’t know anything about the concept of insurance products, you can help you learn relevant insurance knowledge through the policy health check. On the one hand, this problem is related to you, so you will want to understand me. Where is the money spent, and what kind of protection do I have now? On the other hand, the more you know about insurance products, the more you will know what protection gaps you still need to make up. When buying products, you can clearly state your needs and ask them to give you products that meet your needs, so that you won’t find that you have bought a bunch of products that are contrary to your own needs after you buy them.

The author’s policy health check at the time was through three channels: buying books or online courses, looking for friends who are studying insurance, and asking for consultation with an insurance broker.

Buying books or online courses is mainly to help me clarify some proper terms of insurance, such as the above-mentioned main contract, attached contract, levelling premium, natural premium, lifetime type and regular type, monthly payment, single payment, etc. The proper nouns of these insurances have a basic understanding, so that I will not understand the content of these products when I check the products of my policy, just like when you buy in the supermarket, you will understand the composition of this product What is the same truth.

After you have the basic knowledge of insurance, the next step is to discuss with friends who are studying insurance. As a first diagnosis, he may give you some directions that can be adjusted or optimized after reading your insurance policy to help you construct An insurance framework and scope, or remind you in the discussion which parts of the insurance you should pay attention to. If you don’t have friends who are suitable for discussion, it is recommended to buy the insurance policy opened by Mr. Li Baifeng in Hahow.“The first introductory course on petty bourgeoisie insurance”follow the course content taught by Mr. Li Baifeng to check the policy information in your hand.

After completing the initial consultation of the insurance policy, my last step is to find a professional insurance broker for follow-up consultation. He helps. On the other hand, because he is an insurance broker, he must know more types of commodities in the market than I do. As long as I put forward my needs, it can not only reduce misunderstandings in communication, but also obtain different types of commodities. solution to let me do the final evaluation.

Therefore, when I have completed these three steps, my policy health check process is almost complete, and the next step is to think and evaluate which insurance product solution to choose.

When I was thinking, thinking and evaluating which insurance product solution to choose, I used the platform of Finfo insurance information station, because it has a function of trial premium, I can quickly build my insurance portfolio through his trial calculation, Then compare whether the premiums and protection items of each combination can fill my risk gap, and whether the premiums of this combination and its protection content are a reasonable price.

Since I assembled my solution on the platform of Finfo insurance information station, I made an appointment with an insurance brokerage company that cooperates with this platform to assist me in inquiring about suitable product content. Insurance brokerage companies can also display the product content that has been combined in Finfo. When consulting with an insurance expert, they can directly show the screen for him to check. In conclusion, Finfo is a platform that is full of convenient combination of insurance products.

Platform of Finfo Insurance Information Station. photo credit: Finfo Insurance Information Platform

At the time, I was evaluating insurance solutions based on two dimensions: necessity and security.

necessity

The necessity is that this security gap must be filled. If it is not filled, it will be like a small hole in a ship all the time. It may not feel the risk now, but when the hole becomes bigger and bigger, the ship will have a small hole. The risk of the ship sinking is also very high. Taking myself as an example, most of the insurance I had at the time was mainly cancer insurance and accident insurance, and there was no protection in the two aspects of disability insurance and serious injury. If it is really unfortunate If the illness I was checked by the doctor one day was not from cancer insurance, my cancer insurance claim would be almost invalid, and it would be almost impossible to buy major commodity insurance afterwards. (If the insurance company has doubts about your physical condition, it is likely to refuse insurance, just like you often owe the bank money and have a poor credit record. When you urgently need money and want to borrow money from the bank, they will will be reluctant to lend you money because of your bad credit history)

The other is the disability insurance part, that is, when an accident occurs, causing the whole person to be unable to walk or live normally, you need to have a passport. When living, if there is no disability insurance, you may need to use the original. Existing assets are used to pay for all expenses after disability, but if there is disability insurance coverage, you can ask insurance companies to help you for part of the expenses, at least to make your own economy more flexible.

The rest of the risk is covered by the existing insurance policy, so I will include it as an option. If there is room to buy it, it is an optimized solution.

Guaranteed

After confirming the necessity of insurance products for yourself, the next step is security, that is, when a risk occurs, how much security do you think is enough?

Since everyone has different needs and ideas for protection, it is difficult to use a common standard to measure whether the protection you currently have is enough for you. This part of the advice can be discussed with insurance experts. .

Another thing to keep an eye on is, are these coverages commensurate with the price I’m willing to pay? , Since everyone is willing to pay different prices for commodities, it is reasonable to spend how much to get these guarantees, or it depends on the value each person brings to you for this commodity, that is, this How much “utility” does the insurance product bring to you?

Just like the utility of water and diamonds will be different in different situations, for example, in the desert, the utility of water will be higher than that of diamonds, so you are willing to spend more money to buy water, and in the wedding On occasions, you may be willing to spend more money to buy diamonds, so the insurance coverage is the same, and the protection items required in different situations will also be different, mainly depending on the protection in this situation. You get this coverage for your utility and how much you’re willing to pay.

A person’s life may go through many stages, and the risks faced by each stage will be different, so whether the protection you have is sufficient to deal with the risks of that stage of life when you are a newborn, 20, 30 or 40 years old It will also be different, so regular review and optimization of insurance portfolio is a very important part, but if you can take into account the major risks that you may face at different life stages in the early stage of purchasing insurance, it can save you the need to adjust and adjust later. Optimized time, after all, for many insurance products, you may need to pay premiums for a period of time when you sign a contract. If the products you buy cannot bring you equivalent utility, then you may need to pay other resources to avoid the risks that may occur at this stage.

Going back to what I mentioned at the beginning of the article, “Asset is putting money in your pocket, and liability is taking money out of your pocket.” If you buy an insurance product that is the most effective for you, then When a risk occurs, he can really help you through the financial crisis and reduce your risk loss. Although he is taking money out of your pocket on the surface, he is actually helping you increase your assets against unexpected risks. .

On the contrary, if the insurance product you own is extremely ineffective for you, can’t help you at all in the face of unexpected risks, and will also cause you a financial burden, then he is really taking money out of your pocket. Take it out, and insurance will be a liability to you, not an asset.

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