Hi all,
Pardon me for not searching through the entire HWZ forum, may I know is there any discussion on the different type of insurances and what is more important to buy first?
If there are no such posts before, hope we can start one. There are so many products out there and we are unsure which to buy.
To clarify, I am not an insurance agent.
I just want to know more and not be another "carrot".
Thanks!!
Please look through the stickies as well.
You will find that the forum tends to have very strong opinions, who believe that X, and only X, is the best way to buy insurance/do financial planning.
Frankly, X, Y or Z might all get the job done. It really depends on individual preferences and situation. What is right for A might not be right for B, etc. There is often more than one right answer.
Here, most people tend to lean towards DIY financial planning, but not everyone has the time, interest, ability or energy to do that, as there are so many financial products/services out there.
In practice, I think most people end up doing a mix of DIY and "outsourcing" the rest. It's a bit of a spectrum, depending on the individual.
I recommend finding a good professional, who can gather the appropriate information and make suitable product recommendations. You should first figure out your goals/priorities before zooming in on products.
If you are really concerned about being scalped, then look for a fee-only or fee-based one (although it doesn't mean there aren't any honest commission-based professionals out there), and take some time to educate yourself as well.
Regardless, medical insurance should be one of your first priorities (i.e. the Shield plans).
Normally, some type of term insurance to provide for death and disability should also be purchased.
Critical illness (CI) coverage should also be obtained, as the incidence is pretty high (1 out of 4 will get a CI), but it can come in various forms. The premiums for CI will be higher than the others due to the higher incidence (and thus claim amounts).
I have encountered some people who choose not to get any CI cover but self-insure instead, by using the money for investments instead of on insurance premiums. There's no one answer that is correct for everyone. Important thing is that one understands what they are doing.
Some other important points:
Oh yes, you have the right to ask the agent how much commission they make. And you also have the right to cancel the purchase of any insurance/get a refund of any plan you bought within 14 days of receiving the policy documents.
Generally speaking though, the more the premium, the longer the duration of the plan, the more commission they will get. So, a plan where you only pay once (single premium) will have lower commissions.
Medical/hospital insurance and some types of term plans (not all) tend to have the least commissions. The plans that tend to give the best commissions are the regular premium investment-linked plans (ILPs) and whole life plans.
