What Is Insurance And Why Do You Need It

What is insurance and why do you need it


What is insurance?

insurance is a product that will payout a certain amount of money or benefit when certain of the condition triggered.

The most common condition is sickness, accident and death. Of course there are also others condition that triggered the payout to the buyers.

The example will be you pay for a medical insurance. When serious sickness happened, the insurance will pay for your medical bills. The condition is the medical condition and the payout is the payment of medical bill from the insurance company.

What are the four main basic type of insurance

Car Insurance

Car Insurance

This insurance will pay you when accident happened and when you claimed it. When accident happened (normally between two vehicles), the faulty side will have to claim his or her insurance for the damage happened to two party.

So in this kind of situation, the single insurance claim will be benefit for two party. The damages claimed normally is for the damages of the car. Some insurance will also have a small coverage for the passenger and driver that injured in the accident.

But please be aware that the payout for the injuries may be limited and may not be cover all the fees for the injuries.

Medical Insurance

Medical Insurance, Medical Card

The common insurance is the medical card. Medical card is sound as its named, supply us the money to receive the treatment when we have diagnosed certain type of illness.

When you buy a medical card, you need to know that what are the illness are covered and how much does it covered. You must also ask clearly the insurance coverage period if something really happen to you.

Some of the product will have specific coverage for the illness and some of the insurance product will have a wider coverage of illness.

Life Insurance

Life Insurance

This is the insurance needed the most for family income supporter. When one passed away, the insurance will give out a certain amount of money (depend on the life insurance product that you buy) to the nominee(s).

Of course there are many types of life insurance, you need to consider carefully before you buy them. There are separated to two basic types of life insurance, the term life insurance and whole life insurance.

The term life insurance will provide certain benefit in a specific duration of period depend on the product that purchased.

While the whole life insurance can help you to build up the value of the insurance across the period of time you paying for the product when the buyer of the insurance still alive. It can also increase the amount that can be receive to the nominee(s) across the buyer life-spans.

Investment and Saving Insurance

Investment and Saving Insurance

Investment and saving insurance. This is a insurance product that help you to invest. When period is mutual, you can take the money back with the return from the investment.

It is simple but not a very good idea for investment. In my opinion, it is always better to learn how to invest ourselves so that we have the control of what we invest in.

Besides, the investment insurance normally have a certain amount of processing fees and management fees. So of the investment insurance also need to pay for the annual fee.

It is always not the first choice when comes to investment insurance. But there are always have the exception. Investment insurance also have it benefit and useful depend on individual situation.

If you are young or have time, try to learn to invest yourself. From learning investment, you will learn a lot thing that not only about money that school did not teach. There are few like emotional control, discipline and planning your own life.

Why you need it

Why you need insurance?

It is because we don’t know when is the bad luck come. We cannot predict the future. Right?

We need to know that we need to have a buffer for the bad thing that happen. Example when you have a food poisoning and needed some money for medical fee, where you can collect that amount of medical fee when you don’t have extra emergency fund?

Is it easier when you have a medical card? As you can directly receive treatment ASAP.

There is another factor, if you want to pay the medical fee for your own without insurance, you will have to pay a large amount of money which is NON-REFUNDABLE. The amount of money will just transfer to the hospital’s bank account.

Insurance allow you to leverage like “paying less to get more” if anything happen. I know it’s not sounds very good to talk about the bad things that didn’t happened. But we must prepare for the rainy day. So we will no need to cry in the rain.

Who & when you want it

I got my first insurance when I’m still a kid. It’s lucky I have great parents.

Then, I continue to pay my own insurance when I started to work.

I think all of us need to have a basic medical insurance when we get our first job. For my opinion, the insurance fee you pay for should be around 10% of your salary.

It is very important especially for a fresh graduates to have a medical insurance.

For a fresh graduate, the saving that can made is almost a little or none. If having an accident or serious illness, a big tons of money will be needed. So, this is when the medical insurance will be used.

So I will encourage all the graduates to get one of the medical insurance for the “in-case” situation. We cannot predict what will gonna happen right.

The other important insurance product is a life insurance. You will need a life insurance when after you have your medical insurance covered.

It is a priority for one who have family to own a life insurance. Especially they are the source of income for the family.

Imagine what will happen when that person is passed away and the source of income has gone. Family member will have financial difficulty if life insurance is absent.

Life insurance is one of the responsibility for the one who take care of the family. if bad thing happen, the family member still will have time and money to go through that critical period of time and no need to worry about the money problem in the short period of time

Advantage & Disadvantage of Insurance


The main advantage of having an insurance is having a protection of money problem. if one having a medical issue, claim insurance. If a family support pass away and have no income support, claim the insurance. if your car damaged, claim the insurance to repair it.

The product can protect us from the unexpected situation and free us from a critical finance situation.


The most common disadvantage of all time that many people think off is the money that paid for the insurance is “wasted” and never used it at all. Many individual will have this mind set and lead to ignoring the importance of insurance.

Should you buy an umbrella when or after the rain?

Will it be too late?

In my opinion this “disadvantage” is not a disadvantage.

Another thing to be mention is the absent of coverage for some situation after paying for the insurance. When one want to claim for the insurance, the insurance company may say the condition cannot be claim due to the coverage of the insurance policy.

The contract of the insurance must be read clearly and understand it before you buy it so that it will not be the disadvantage of buying an insurance.


You need to know what insurance and the type of insurances. So that let it work as a tool to support you.

Buy an insurance is just like prepared an umbrella in-case of rain. if you are the income support of your family, you should know more about this knowledge so that your family member will be protected.

When you are protected by insurance (by buying the suitable insurance product for yourself or your family member), if anything happen to you, you will no need to worry about the money problem.

Just to remember there are only the most suitable insurance products and not the best product. You should seek for a professionals to plan and buy your insurance.

For the more detail of insurance product information, You should consult from the professionals. The product policy may change and improve as the time goes on. These information is just for the basic information sharing purpose only.

Thanks for spending your precious time together.

Let us grow and learn together.


Jordan V.
Trade Make Cents

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