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How do I choose an insurance policy that best suits my needs?

Insurance is a risk-transfer tool. An individual who takes out an insurance policy pays a premium to transfer the risk of a potential financial loss to an insurer. The larger the expected financial loss, the more important insurance is. To deal with unpredictable risks and to ensure financial security, it is better to take out appropriate insurance as early as possible. No one can predict the future. Without being insured, you may experience financial hardship in the event of an accident. But if you are insured before the accident, you will receive monetary compensation from the insurer to cover at least part of your costs. The earlier you take out an insurance policy, the sooner you are protected. How do I choose an insurance policy that best suits my needs?Changes in the stages of your life affect your risk exposure and responsibilities. To choose a policy that suits your needs, you should, in general, identify your protection needs and objectives according to your current life stage. You can use the online assessment tool developed by the Insurance Authority to find out whether your existing insurance coverage is adequate for your circumstances and forecast your insurance needs for the next 50 years. Which types of insurance do I need?Consider why you want to buy insurance and learn about the functions and features of the different insurance products so that you can choose the type that best suits your needs in different stages of your life. Here are some common insurance products for individuals:1. Life insurance2. Critical illness insurance3. Medical insurance (Group and individual medical insurance)4. Accident insurance 5. Annuity6. Fire insurance or home insurance7. Motor insurance 8. Travel insurance 9. Domestic helper insurance Should I purchase every type of insurance? Is more insurance always better?Everyone has their own path on their life journey with their particular circumstances and financial situation, so everyone has different insurance needs. Furthermore, some insurance products, like medical insurance, work on a reimbursement basis. You cannot claim more than the amount actually paid even if you are covered by a number of insurance policies or a policy with a huge sum insured. And the more policies you have and the higher the amount insured, the higher the premiums you will have to pay. Be sure you do not end up with financial problems because of taking out too many policies. Before choosing an insurance product that suits you in terms of coverage, sum insured, premium level and risk level, identify your protection needs according to your current life stage by making reference to one of the following situations: childhood and adolescence, young adulthood, mature adulthood, raising a family, pre-retirement. For more details, please visit the Insurance Authority’s thematic sitelet or its YouTube channel to watch the relevant video series (The information is abstracted from the Insurance Authority’s thematic sitelet)