Why still get life insurance?


Most people believe that term life insurance is consumption and is money wasted. As for life insurance, the premium expenditure is too high, and the pressure is unnecessary. People usually agree that they do not necessarily need to get life insurance when other protection (accident + medical treatment + serious illness) is rather comprehensive.

This article, however, is about the significance of life insurance for us.


Life insurance takes the life of the insured as the subject matter of insurance and takes the survival or death of the insured as the payment condition. Like all insurance businesses, the insured transfers the risk to the insurer, accepts the terms of the insurer and pays the premium. Different from other insurance, life insurance transfers the risk of survival or death of the insured.

From this definition, we can know that life insurance is an insurance with the death of the insured as the payment condition.


The following basic logic of insurance is quite easy to follow:

Ø Accident insurance refers to the insurance that the insured needs to pay the insurance premium due to the occurrence of an insured accident, except for death, and the money needs to be consumed. The insurance amount of accident insurance equals to 5-10 times of the salary income, that is to say, the amount of compensation is equal to your actual loss, which does not include other liability funds, such as children's education, parental support, housing loans, car loans, etc. This also proves that the compensation paid by the insurance company is not enough to supplement the liability funds you should prepare in the future.

Ø Medical insurance, pure reimbursement type insurance and nonpayment type insurance are basically impossible to have extra money.

Ø Serious illness insurance is a payment insurance. The serious illness insurance amount equals to the total amount of average disease cost at that time, loss of income in the next three years, continuing treatment cost in the later period, and rehabilitation cost. It can be seen from the formula that the insurance amount paid by the serious illness insurance is only enough (unless the designed insurance amount is much higher than the general cost level), although most of the insurance amount is just enough for the actual expenditure due to the premium.


To sum up, considered from the above three aspects, we can draw a basic conclusion that when we encounter the above personal risks, the insurance purchased can only supplement our losses, but not our family liability, that is, children's support and education funds, parents' support, family living needs, and other expenses such as housing loans, car loans. Those that should be borne by us are the family responsibility funds that we should prepare.

Therefore, we still need life insurance as a supplement, even though we already get other insurances like medical insurance, critical illness insurance, and accident insurance, for life insurance is a more profound protection for not only ourselves but also our family that we love would do our utmost to protect.