Stop saying Insurance is a scam!
Insurance is designed to mitigate the impact of RISK! Even Big Banks insure themselves, let alone average folks.
Do not try to measure RISK, using your calculator, if it is doable, then it is definitely not RISK.
Insurance can not change the way you lead your life, but can definitely prevent the quality of your life being changed.
Often the importance of Umbrella (Insurance) is realize on Rainy days, when you do not have one.
It is just like after your "Toilet business", and you are stranded in the cubicle without Toilet paper (Insurance).
Ain't it too late to ask for help?
Wisdom is the ability to plan ahead of life.
The function of Life Insurance is to provide financial security against Life Unexpectancy. Traditional Whole Life policy provide such benefits. As we progress, Insurance companies designed different policies, to cater to every individual needs.
Today, Insurance has evolved beyond their basic functions. Other than just financial protection, it is also a tax free wealth with compound benefits, which can also serve as your retirement nest.
Most would think, having Insurance is a shield against RISK, and is exactly the same, if I were to save with the banks, should there be any emergency, I will have easy access to the money.
The truth is, Not the same.
Let's say a Bypass surgery, cost $50,000 for a stem and $100,000 for 2. Supposedly, you save $3,000 with the bank each year, how long would it take for you to save up to $100,000? 30 years!
In the event, you need this sum of money within the next 10 years. Would your bank pay you interests of $100,000?
However with the same premium of $3,000, you would have successfully transfer your $100,000 obligation to Insurance and be assure of the pay out.
Most have the misconception that, if they remain healthy during their lifetime, the premiums would be forfeited. Which is absolutely not the case, after 30 years, in addition to the principal, you will be enjoying the compounded interests.
2 Distinctive differences:
So if you save with the bank, you need 30 years to accumulate $100,000, whereas Insurance would pay the lump sum immediately, in the event of any mishap.
What if you remain healthy after 30 years? Fret not, you still get back what you pay, together with accrued bonuses.
Some say, I am very healthy, "it" would never happen to me. IF really happens, I am sure the bills would be affordable.
I ask, if a person has so much money, that he would never be able to finish in his lifetime, is it true that medical issues are insignificant?
World's richest man, Bill Gates say:" Medical Insurance is the lowest costs policy, yet the most efficient tool to manage healthcare." Falling sick does not just affect your lifestyle, it also affect the quality of your life.
If you deposit $500K with the bank, should the bills cost you $500K, your account would be wiped out instantly. What kind of impact do you think, it would have on both you and your family?
Alternatively, you could deposit $400K with the bank, $100K with insurance to create a $1 million Sum Assured. This is how the sums would work out to be, you get the million compensation, $500K to pay for the medical bills, the balance of $500K plus the $400K in your bank account, you have a decent $900K, to take care of your lifestyle.
