A life insurance is one of the ways you can give yourself peace of mind. It does not matter if you are the sole provider for your family or you and your husband share the financial burden. Your loss will be devastating enough for your family. The financial consequences of your passing will make things much worse.
Although talking about death is an uncomfortable topic, it is one that we need to consider. We are all hurtling towards this event in our life. Some take a long route, while others take the shorter road towards it.
Since death is guaranteed to happen anytime, we need to make sure that our family will be well provided for when it happens. While the finances will not be enough consolation after you pass away, it will ensure that your family will have something to live on as they grieve.
An insurance is one of the best ways to have peace of mind. That peace comes from the financial protection that you and your family will get once something happens to you. It is all about managing the various risks in our lifetime. Having an insurance coverage will transfer some risks to the insurer.
There are many types of insurance in Hong Kong. You have the medical insurance that will help take care of health-related costs. We also have a home insurance that will give you financial support in case something happens to your house. The same is true for your car.
A life insurance is something that will protect your family in the event of your sudden demise.
According to the data provided by the Office of the Commissioner of Insurance, the total premiums in Hong Kong rose to $339.3 billion in 2014. This is an increase of 13.3%. The insurance industry is a growing sector – all because people are clamouring for security and peace of mind.
If you want to have the same security, you may want to look at your life insurance.
What is a life insurance?
In a traditional life insurance, the claims will not really benefit you as the policyholder. When you get life insurance for yourself, you are actually making sure that your beneficiaries are okay.
Your beneficiaries are usually your spouse, children, parents, brothers, sisters, or other relatives. It can even be a close and trusted friend – in case there is no one in your family left.
When you buy a policy, you become the policyholder. That means when something happens to you that costs your life, your beneficiaries will get the financial benefits of the insurance.
Of course, claiming the benefits will have to meet the conditions of the insurance. These conditions will depend on the type of insurance you will get.
There are three types of life insurance in Hong Kong:
Term Life Policy.
This is a type of policy that will give your beneficiaries a lump sum after you pass away – at least if it happens within the term specified in your policy. For instance, if your term is only good for 10 years and you died within that period, your beneficiaries can file a claim.
Whole Life Policy.
This type of policy will give a cash value for your entire lifetime. It will be converted into a lump sum amount and dividends after you pass away.
Endowment Policy.
This is a type of policy wherein a claim is dependent on where you die before or after an agreed date. If you reach a date, you get a lump sum payout. If you die before that date, your beneficiaries will get a death benefit.
When choosing a life insurance, it is important that you decide to depend on your lifestyle and who your beneficiaries are. Just keep in mind that the higher the risk, the higher the premiums that you have to pay to sustain the insurance.
What you need to know when getting a life insurance
Take note that there are other life insurance policies that give more protection to policyholders. For instance, you can get a policy that will pay you a lump sum amount after you suffer from a pre-determined critical illness.
There are also policies that will allow you to a claim for a disability. In case your health causes you to lose your job or leave you unable to work, there is also a policy that will allow you to get a claim. Chance
If you are looking for a way to invest your money, an insurance is also a great way to do that. To be specific, life insurance is also one way to secure your finances for future use. This is actually the strategy that Mainland China citizens are doing.
In an article published on Kapron Asia, more than a hundred thousand citizens of Mainland China have reached out to Hong Kong to secure their finances from the Yuan – which is currently depreciating. They are doing this through insurance policies.
Most of them are purchasing life insurance to help cash out and transfer their funds to either Hong Kong Dollar or US Dollar.
Given the protection, security, and investment opportunity of getting a life insurance, you should understand how important this can be. Here are valuable tips that you need to follow if you want to buy this type of insurance.
- Understand what you really need in terms of coverage and protection.
- Choose the type of insurance that will meet this need.
- Find a trustworthy and reputable insurance broker that understands your goals and can help you meet them.
- Apply for the insurance and read the small print.
- Consistently pay the premium. Often times, you lose your eligibility for the claim if you fail to pay the premium – regardless if you had been paying for a long time already.
- Understand the details of when and how you or a beneficiary can file a claim.
Since this is a life insurance, there are certain factors that will affect the monthly premiums that you will pay. Things like your health conditions, habits, cover amount, and the type of life insurance that you will get – all of these will be considered when the insurance company calculates your premiums.
The key to being successful in getting a life insurance is to understand the coverage. Feel free to talk to your insurance agent to discuss any part of the insurance that you do not understand.
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