Three Notes on Insurance

Note 1. Cover or protection first, investment next. In the present period of economic difficulties, medium and low income families should have priority in covering both the short-term insurance of pure consumption and the long-term savings insurance of pure protection, namely, first cover such non-investment insurances as Life Insurance, Health Insurance, Pension Plan and Education Insurance, then take the investment insurances into account like Participating Insurance, Universal Insurance.

Note 2. Adults first, kids next.The main objective for medium and low income families to purchase insurance is to prevent their family economy from great losses by means of the insurance protection of the company when an accident happens to one of their families. Therefore, the limited premium budget for the medium and low income families should be considered as the major economic pillar insurance, and the covering order should be like ” Adults first, kids next”.

Note 3. Suitably shorten the period of insurance. The long-run or short-run period of insurance is directly interrelated to the high or low rate of premium. In the aspect of Life Insurance, the cover rate of both Accidental Insurance and Time-fixed Insurance per year is lower than that of Whole Life Insurance, while in the way of health protection, the rate of both major consuming illness insurance and great fixed-period illness insurance is also lower than that of Whole Life Illness Insurance. Athough Term Life Insurance is the same, yet there are still differences in the period of insurance, and the corresponding premium has different standards or grades. Therefore, in order to save the charge of insurance, medium and low income families should suitably shorten the period of insurance, and it’s OK that the insurance protection exists once in urgent need of insurance cover.