What is Insurance?
I love the definition being given by http://en.wikipedia.org/wiki/Insurance on Insurance that go as this “Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange for payment. It is a form of risk management primarily used to hedge (protect) against the risk of a contingent, uncertain loss.”
What type of Insurance should i get first?
There are so many different class of Insurance out there in the market. Hospitalization, Death, Total & Permanent Disability, Monthly Disability Income, Accident, Early Critical Illness and the list can just go on, but these should be the main different classes of Insurance out there.
And if you have sufficient or ample of this resource called Money, you could simply just purchase all these Insurance and have they built into your Wealth Preserve Safety Net.
But this is one tough question to answer if you have limited Money resource. What class of Insurance will be the highest priority for me to have, for my Wealth Preservation Safety Net, as to protect against risk of uncertain monetary losses? Read on for the type of desired Wealth Preservation Insurance to get!
2 Wealth Preserve Insurance to get – Hospitalization & Monthly Disability Income Protection
The main role of Insurance is to protect our self in events that will caused unforeseen monetary losses. First of all, we need to identify our source of income. It can be in the form of Direct or Indirect Income;
- Direct Income
- Salary for Employee
- Freelancer Fee/Salary for Self Employed
- Director Fee/Salary for Business Owner
- Indirect Income
- Dividend/Rental for Investor
Especially for those that depend on Direct Income(Salary) as the main and only source of income. It is criterial for us to have and to maintain a healthy body, in order to operate our job. But once we lose this main criteria, we may lose our income. Imagine this situation where a cleaner whom lose one of his leg to diabetic. He most probably will lose his job and end up in a hugh monetary liability due to loss of income and plus a heavy hospitalize bill.
Even for those with Indirect Income, it also important to have some form of Insurance for Hospitalization, to protect against the possible hugh hospitalize bill that may eat into their wealth.
Generally speaking, everyone should at least get Insurance for Hospitalization Protection, as to minimize the possible monetary lose against hospitalize bill. And it applied to everyone out in the world. For those living in Singapore, we are consider fortunate to have MediaShield Life coming in end of 2015, (Click here @ http://www.moh.gov.sg/content/moh_web/medishield-life/8-things-to-know.html to know more about it) that cover the basic of Hospitalize Protection.
Secondly, it pay to have some Monthly Disability Income Protection, as that will act to cover the period after hospitalize, as trying to rest and nurse back to pink of health. Knowing that you are covered during that period, you will be in a better mental state to rest, than to worry about make both end meet.