Types of protection

All insurance works in the same basic way: you make a regular payment to an insurer, who in return agrees to pay you a larger sum of money if a particular event takes place. The size of your regular payment (called the premium) depends on the insurer’s estimate of how probable this event is, and how large their payout will be. In a way, you are making a ‘bet’ that something bad will happen to you; if the bad thing does happen to you, then the bet pays out.

Some kinds of insurance are compulsory, such as car insurance or home insurance on a mortgaged property. Others are highly advisable, while some may be just nice to have, but all have their potential uses for protecting yourself, your family and any other dependents.

Life Insurance

This is insurance that pays out in the event of your death during a particular time period. This can be invaluable if you are a major or sole household earner, as it can ensure your family is provided for. It can also be used to reduce inheritance tax.

Critical Illness Insurance

This is insurance that pays out a lump sum cash if you is diagnosed with one of the specific illnesses on a predetermined list as part of an insurance policy.

Medical Insurance

Expensive medical treatment and loss of income during illnesses or hospitalization could result to disastrous impact to your financial resources. To protect you and your family against such unforeseeable events in life, various medical insurance plans could help to ensure that financial support is available when you most needed them.

Endowment / Savings Insurance

Life insurance policy that pays the assured sum on a fixed date or upon the death of the insured, whichever comes earlier. Endowment policies carry premiums higher than those on traditional whole life policies and term life insurance, but those high potential dividends and bonuses are earned by investing on different assets, which are useful in meeting special lump sum needs such as college expenses or for retirement need.

Find out more about each kind of protection by clicking on the links. Your PWM can help you find the right kinds of protection and appropriate levels of cover.