Before you know if you need a personal insurance, it is good to understand what personal insurance is.

Insurance is a form of contract between two parties where one party call insurer or the insurance company who undertake the risk for a sum of money call premium. Another party call policy holder who responsible to pay a premium to the insurer in exchange for a fixed sum of money ( sum of insured ) should the event cover in the contract occurred.

For example, a person buys a personal accident insurance from an insurance company for the sum of USD100,000.00. If that person met an accident and loss his/her life, the insurance company will compensates their family with USD100,000.00.

So insurance is a financial leveraging tools where you pay a small sum of amount in exchange for a bigger sum of money should something happened to you.

Why do you need a personal insurance ?

First, you have to ask yourself, if something happen to you today, for example, you met an accident and lost your life, for lost your leg, your eye sight. Will you or your family member depending on you able to survive financially in the future ?

If the answer is yes, then you do not need insurance because you are self insured.

If answer is no, then you need an insurance to protect you or your family depending on you.

What if you do not have anyone depending on you ? Do you still need an insurance coverage ?

Let’s go through this scenario, Mr. A is 30 years old, single and work as an accountant, he has got a good salary and some saving. Does he needs an insurance coverage ? 

Before we decide if Mr. A needs an insurance coverage, we need to find out some fate about Mr. A.

1)     If Mr. A diagnose with a serious illness tomorrow, does he has enough money to undergo medical treatment ?

2)     If Mr. A lost both his hand tomorrow, does he able to carry on his job and earn the same income for the rest of his life ?

3)     If Mr. A meet an accident tomorrow and become disability and ward on bed for the rest of his life, does he has enough money to hire a maid to take care of his life for the rest of his life ?

If any one of the answer is NO, then Mr.A needs any insurance coverage to ensure that he will enjoy the same quality of life should something bad happen to him.

It is always good get advice from the professional, call your financial advisor today to find out more about insurance coverage that you need.