Probably you already know that you have to transfer some risks of health and injury to the insurance company. Sometimes insurance may appear to be really complicated and complex, with many tables filled with much numbers and percentage and decimals. Also, the representative may be saying lots of things, on and on, non-stop, like a machine gun, it appears that everything is important! Ok, so maybe everything is important, and, which exactly are more important and which should you choose to assess right now?
Let me provide a guideline.
Reimbursement Basis
Nobody likes to use their own money to pay for something. Maybe that was a sweeping statement. I think most people don’t like to use their own money to pay for something. What do you think?
When a person stays in the hospital, visits the clinic, or sustains an injury and goes for a medical scan at the hospital, in all of these scenarios medical expenses are incurred.
Who pays for these expenses? The answer is You. What if you could be reimbursed, or should I put it simply, be paid back for all these expenses? Would you want it?
And so, the first step would be to choose all the insurance that covers medical expenses. This would typically be the hospital shield plans and the accident insurance (make sure it covers for medical expenses).
Compensation Basis
Income is possibly the most important practical thing to a family. If this income is lost, meaning if the breadwinner falls sick or is injured and cannot work, how much do you think the family would want to be compensated? For how long? This is an aspect of protection most overlooked by people.
A terrible illness or injury when it hits us would cause some pain, some discomfort, some unhappiness, grouchiness, or sadness.
The question is if we were compensated for whatever we felt, how much would we want? Imagine. You’ve lost the small toe of your right foot, but you were compensated $10,000. Would you feel better? No? How much is enough? Imagine. You were hit with a terrible illness, and because of that, you’ve lost your direction in life, you feel depressed about life. If because of that, you were compensated $100,000, this amount of money could be used to pay off some of the housing loans; it could contribute to part of your child’s education, it could be used for you to travel to a nice destination to re-think about life. Would you feel better? No? How much is enough?
Death comes to us all. The only fear could be that death comes too early, and we leave people we care about in the land of the living. These people could be our children, our spouse or our parents. What is the impact of your death? Would it cause them to be unable to pay for the house mortgage, or university education, or living expenses? How much do you want your family to be compensated for your death? Do you think they should be compensated?
And so, the second and last step would be to think about how much you would want to be compensated for all the bad events that happen to you or your family.