Why is life insurance a must-have?


After we get the critical illness insurance, we also have to get an accident insurance, so that our protection will be more comprehensive. 

Our topic today: Do we still need term life insurance after having critical illness insurance?

The answer is: It depends.



Life insurance, to put it bluntly, is an insurance in case of death, and some types of life insurance will also cover total disability. Life insurance is classified into fixed term and life-time insurance.  Why is term life insurance mentioned here?

Because for most families, term life insurance is usually more suitable, since the price is lower, and the protection period is more in line with the actual needs.

However, why do we still need them if the serious illness insurance we get already includes death, total disability, and serious illness liability? 

It seems that we have to give a sad example first. 

The next-door neighbor was found to have liver cancer in early 2015, and the family cooperated with the hospital in active treatment. However, the neighbor unfortunately passed away in 2016, at the age of 39. He left a 13-year-old daughter who had just entered junior high school, a nearly-70-year-old mother who needed to support, and a wife. Apart from the bills arising from medical expenses, as well as the expenses in the mother’s living and the daughter’s education. 

Suppose in this case, the neighbor got the serious illness insurance, and the amount paid by the insurance may be enough for the treatment expenses. The children's future living and education expenses and the elderly's alimony expenses will all fall on the wife's shoulders only.


Serious illness insurance

The compensation of serious illness insurance can usually cover the expenses and losses in three aspects: huge medical expenses + afterwards rehabilitation expenses + income loss.


However, at present, the most majority of the serious illness insurance in the market is bound with the life insurance liability, that is, the insurance content of a serious illness insurance will contain the protection of serious illness, death / total disability at the same time. So that the insurance amount is shared: that is, after the death, serious illness and total disability are compensated for one, the insurance contract is terminated; Or after the compensation for serious illness is paid, the amount of death / total disability insurance will be reduced by the same amount.


The most worrisome situation is that serious illness runs people out of money, as well as life.


Life insurance

Life insurance, that is, death compensation, is usually used to make up for the part of economic support that one can provide for the family [through the insured’s own income] in the future. For example, the children's future living and education expenses, the elder's future maintenance expenses, the family's car loans, housing loans, etc.


Therefore, if we have responsibilities and liabilities in these aspects, it is recommended that life insurance should be purchased separately. The guarantee period is determined according to the duration of responsibilities and liabilities, such as the coverage of the child’s growth to adulthood and the repayment of housing loans.


When we come to this world, we have families and loved ones. Term life insurance is a must-buy if we would take our responsibilities for our family, and if we still have to pay bills; if we love our family enough, and if the amount of serious illness insurance is not high enough.