Benefits of Insurance

Insurance functions as a form of protection. While we may see your assets just as items or savings, your most important asset is actually yourself. Without you, all your assets are meaningless. Therefore, it is most important to protect you and your loved ones at all costs. Moreover, the cost of insurance increases with age, therefore, it is more beneficial to get it sooner than later. After all, what’s the harm in some extra protection and coverage? You buy insurance for your car and your house, why not get protection for yourself?

There are many different types of insurance to fit different needs, personalized to you. If you are considering looking into insurance but are not 100% sure what the benefits are, then hopefully this article will give you more clarity.  

Protection for You and Your Family

As you earn more money, you and your family will be accustom to a certain standard of living, which will depend on your ability to earn money, which is why insurance is vitally important once you start working and a family. Having insurance helps cover the medical fees to pay for treatment, giving you and your family the peace of mind that if anything happens you will be protected any financial hardships that may come with heavy medical fees, thus allowing you focus more on recovery/grief. 

Skipping the Queue

In Hong Kong, there is the public and private healthcare system. If you are entitled to the benefits of the public healthcare system, the treatment is very affordable, but the waiting time can be years depending on your condition. When push comes to shove, would you be willing to wait that long to receive treatment? With insurance, private hospitals becomes more affordable, and you will be able to transfer to a private hospital and skip the long waiting times. 

Tax Savings

Here in Hong Kong, we have the Voluntary Health Insurance Scheme (VHIS). Taxpayers who or whose spouse is the policyholder of a policy issued under a certified plan of VHIS may claim tax deductions of up to HK$8,000 per insured person for the premiums paid in relation to the certified plan. 

Legacy Planning

No one wants to think about death, but you should consider your loved one’s financial situation after you’re gone. 

With insurance, a lump sum death benefit can help secure your family’s financial future and protect their standard of living when you’re not around. A common thing people do is buy life insurance when they purchase a property. This is so that if death does happen unexpectedly, their partner does not need to worry about the financial burden a mortgage can bring. 

Asset Protection

As we get older, we accumulate more savings and assets. However, this means you will have more to protect. 

Some of you reading this article may say “I don’t need insurance. If anything happens, I can sell my investments to pay for the fees.” While this may be true, let me ask you one question: when you were purchasing your investments, was the purpose of that investment to sell and cover your medical fees?

Those savings and investments are likely to be used for retirement, or to buy a property, or for whatever purpose. The point is, you most likely did not invest in those assets to cover your medical fees. Without adequate insurance, your financial cushion may not be as comfortable as it once was if anything was to happen. 

You may think that this may not happen to you, but so did my colleague. His dad was unfortunately diagnosed with cancer and in order to pay for the treatment fees, they had to sell one of their properties. Thankfully, his father has fully recovered now, but if he had adequate insurance, they have been able to afford the treatment and keep the property as an investment.

Final thoughts

Would you feel comfortable driving your family in a car knowing it does not have airbags? Going through life without adequate insurance is like driving a car without an airbag. Insurance acts as an airbag for your personal and financial safety.

If you’re ready to protect yourself and your family and would like to know more about the different types of insurances available, please leave a comment or message me directly!