Is Protection Insurance Right for You?

Why is it difficult to sell insurance? What will it take for you to realise the importance of protection insurance? To better understand why, understand first what Protection Insurance is all about, why it is needed, and how you can better protect yourself, your loved ones, and your properties.


What is protection insurance and what does it cover?

Protection insurance was designed mainly to create a “cushion of protection” against unexpected circumstances that force you into debt, illness, unemployment, or even death if you are unprepared for the future.

Why do you need protection insurance?

Ask yourself why you need to save money every month in the bank or elsewhere. Isn’t it true that you want to have something there when the rainy days come, or because you may have to buy some item/s at the grocery store, cinema, or entertainment centre? These rewards are short-term needs and wants. What about your long-term needs and wants? How do you prepare for them? This is now where Protection Insurance comes in.

Below are five basic types of Protection Insurance available to anyone who wants to live longer, stay healthier, and have a better, happier future.


  1. Life Insurance. This type of insurance is used to pay out an amount of money upon the death of the insurer or after the term has expired. Life Insurance or Term Assurance can be used to pay off debts, as in mortgages. It is divided into two categories: Level Term Assurance, when the amount covered stays the same all throughout your policy term, and Decreasing Term Assurance; the amount covered decreases as the term nears its end. Failing to comply with monthly payments may cause you to lose any right to claim or get back any of the payments already made.


  1. Critical Illness Insurance. This type of insurance will pay out a lump sum of money when the insurer gets critically ill, or simply replace the lost income due to hospital confinement for a specified term, but only if the policy covers that particular illness. Critical Illness Insurance provides a better alternative for protection for seriously ill persons.


  1. Accident, Sickness, or Unemployment Insurance. This type of income protection plan helps you to pay your mortgage and other essentials when you are unable to go to work, get sick, or get into an accident. Your policy usually lasts for 1 to 2 years, although not everyone is suited for this type of insurance.


  1. Home Insurance. Building structure and contents can be individual policies (for landlords or tenants), or joint (for homeowners) to get better rates. Building insurance covers house structure, fixtures and fittings. This type is the collateral when a mortgage is taken out. Contents insurance covers personal belongings inside the house.


  1. Income Protection. This plan lasts much longer. It has two types: Long-term, which provides income until death, or an agreed age, or it ends as soon as you return to work; and short-term, which pays you a fixed amount from 1 to 5 years tops. This type of insurance comes in a variety of plans but with the right financial adviser, you will be able to find a suitable insurance plan.

Take time to study the importance of insurance and protection with your family in the presence of a financial adviser. It will be advantageous to have an expert oversee things when any untoward event happens to you as it will remove years of worry for the rest of your family.

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