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To insure or not to insure?

3-pillars-blog It may not have been a question Shakespeare might have asked but it’s certainly a question many of us find ourselves asking today. Every time a policy comes up for renewal, we’re left with that feeling…”do we really need this insurance? Is it just money down the drain? I haven’t needed it all year so why keep paying for it?”

Despite our niggles, insurance remains big business – in the Hong Kong sector alone, total gross premiums in 2012 reached the cool HK$255.2 billion mark. It’s a number that might prompt many of us to huff and puff and ask why we should be inflating the industry further. However, in our opinion that’s the wrong approach to take. Far better is to concentrate on the needs of you and your family and what will bring you peace of mind. It’s worth asking yourself; what should I insure and what should I not insure? See our FREE Health, Income and Life Guide

Let’s take a look at celebrities; British comedian Ken Dodd famously made a name for himself thanks to a feather duster and buck teeth and as such, those gnashers are reportedly insured for US$7.4 million. Fellow performer Michael Flatley made his millions through Irish dance so it probably comes as little surprise that those fast-moving legs now have an alleged US$47 million insurance tag hanging off them. And while we’re on the subject of legs, David Beckham has made sure his pins are insured for a cool US$70 million. As all of these examples show, insurance is all about making financial provisions for you and protecting you in the event something goes wrong.

As an expat living and working in a foreign country, thousands of miles away from home and often familiarity, what do you particularly value? The list is likely to include your and your family’s health, your ability to financially provide for your family and of course, your income stream.

Let’s start with health because after all, haven’t we all heard the expression “if you don’t have your health, you don’t have anything.” How true it rings when we’re going through a period of ill health or injury. Having some form of insurance in place appears to be a no-brainer, after all fretting about covering the costs of medical care or the long-term implications is far from ideal during times of illness. Going back to the question of what to insure and what not to insure, interrogate the benefits list of each healthcare plan ruling out what you don’t need. Why pay for maternity cover when you are single, not planning a family or indeed have been there, done that and got the t-shirt. On the other hand, if you enjoy adventurous sports, be sure to include this in your cover.

Life cover is a tool to financially protect your family should the very worst happen. The cost of this type of insurance is of course determined by age and the amount of cover required so you need to know how many years of education your children have left, as well as outstanding debts and loans – mortgages etc – you have that would need to be paid off. Before signing up to a plan, check whether you already have some sort of provision in place through an existing financial product and of course, discuss with an adviser the different types of cover available so you know you’re getting exactly what you want out of it.

Many expats opt for income protection insurance which does exactly what it says on the tin – protects your lifestyle if your own income stops – but the cost can vary greatly depending on what you want to be covered eg covering living costs for a short period of time or providing a lump sum to pay off large financial commitments.

Yes the word “insurance” may have some of us raising an eyebrow but a good question to ask yourself is – if something were to happen to you tomorrow, what financial state would you leave your family in? After all, it’s tomorrow when insurance pays its way.

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