Insurance: The Basics Explained

Insurance is designed to protect you and your family financially should something unexpected happen in life. Purchasing insurance is always a personal decision, determined by your current life situation – for example, age, family, lifestyle or existing employment benefits. When working out which insurance is best for you, it helps to discuss this with a financial advisor, but here are some basic summaries to help you.

This product is purchased for a specific time period – say five, ten or twenty years – and provides benefits upon death during those years. Term life tends to be simpler and cheaper to purchase and has no other value beyond death benefits. If you survive the term, no money will be paid to you or your family.

When accidents happen they lead to injuries, medical treatments, disabilities or worse, and the last thing you want to worry about is your finances. If you are unable to work after an accident, your personal savings can easily be used up. Accident insurance provides financial protection if an accident results in a disability, hospitalisation or death. It can also help pay for access to premium medical treatment. You can’t predict when accidents happen, but you make sure you have appropriate financial protection.

The most common chronic diseases are heart attacks, strokes, and cancer. These illnesses often result in medical emergencies with high medical costs. With critical illness insurance, usually a lump sum of cash will be given out, which can be used to help cover for your medical expenses so you and your family can focus on recovery and rehabilitation. 

Choosing the right plan depends on what you can afford and the areas where you feel you need to be most protected and so is always a personal decision. However, there are some general steps to take when going through the process of buying insurance:

• Know what you need – understand what you’d like to get coverage for and how much you can or would like to spend for insurance
• Check the options available – compare the benefits offered, as well as what is not covered.
• Pick the right plan - select the plan you feel best fits your requirements.
• Pay the premium – start paying the premium and don’t stop or you won’t be protected.

You can always speak with a Chubb Life Financial Advisor, who will guide you assess your protection needs and the right insurance for you and your family.