STARTER GUIDE TO FINANCIAL PLANNING
5 Reasons Why I Should Not Buy Insurance?
Being in Singapore, we are surrounded by a lot of insurance providers and it is hard not to have stumbled upon people in public trying to offer you an insurance plan. Even if you stay at home, you will receive phone calls from telemarketers to offer various kind of insurance coverage.
There are some of you who are kind enough to consider and eventually signing up for it. Nevertheless, there are people who refuse or do not want to commit to getting an insurance plan.
There are many reasons why common people would reject:
- You do not need it.
- You do not trust the person.
- It is a waste of money.
- What is insurance?
- It is not a tangible object.
- You simply do not understand it.
This article is to give you a different perspective on insurance. This article will not discuss why you SHOULD buy insurance. There are a lot of articles that will talk about that. But this article will discuss why you SHOULD NOT buy insurance.
Reason no 1: You have lots of money to lose.
Imagine that you are a millionaire. Down the road, you are diagnosed with cancer and you are not able to earn a living anymore. Due to that illness, you have to spend lots of your own money for your treatment. Not to forget you do have a house to pay, a mouth to feed and bills to be paid.
Yes, you can use your millions of dollars but that money will only continue to decrease since you cannot work and earn an income.
You will eventually recover but how long will you need till you are 100% back to who you were? How many years do you need to reach back to that efficient level of productivity? Will anyone wants to employ you back again? Will your previous employer want your back?
Recovery will take time but at the same time bills has to be paid and they do not give you the time you need to pay up as well.
Therefore if you are really well off, have millions of dollars, and do not mind losing your money, then you should not buy insurance.
Reason no 2: You are immune to diseases.
At this day and age, there are still diseases that are incurable. Alzheimer’s, diabetes and Ebola just to name a few. Even with the advance technology that we have at our hands, there is still no answer to certain diseases.
On the other hand, we have made a major breakthrough in finding cures for other diseases. That does indirectly translate to the ever-rising cost of healthcare.
In Singapore, hospitals are being built almost yearly and the current hospitals are going through major renovations. With that fact that means that the government has to cater to the demand and need for healthcare services.
Eventually, it comes to us as individuals, as it is us who fall sick, needing medicine, quick answers and efficient services just so that we can be healthy once again.
Therefore with such need and demand, that is why you are willing to pay for it. And it is normally not a choice as well because it is a matter of life or death.
Hospitals bills are billed differently and it is not something you can bargain. Most people think that they have their Medisave to use but just so you know, there are limitations to the use of it. And eventually, you have to use your own cash to pay for it.
There are cases where families are in debt just because their parent fell sick and unfortunately passed away. Bills have to be paid no matter what. Someone has to pay it.
No disease, no treatment needed, no bills to pay and no need for insurance. Therefore, if you are immune to disease, then you should not buy insurance.
Reason no 3: You have a really safe place to keep your money.
Let me as you a question, where would you keep your money safe? Where is a safe place to place your savings?
Well some might say bank account, safe, under your bed and so on and so forth. This really depends on your own preference.
There are no wrong answers and in Singapore, there is not a high worry about crime. So what does it mean, if I have a really safe place to keep my money safe then I should not buy insurance?
Putting part of your income for insurance will offer you a certain amount of coverage. Normally your coverage is a higher amount than what you have paid for. So that is certainly no loss for you.
Depending on the type of insurance, there is a maturity value or surrender value which means that you will have your money return to you after a certain period of time. That is possible as part of your money was invested and eventually you will enjoy certain amount of returns.
Let us sidetrack for a moment. As you know as time passes by, prices of items are increasing. And that term is called inflation. And if you kept your money in the bank, your safe or even under the pillow after 20 years, will it be that same amount of money be on par with the price of items? Well most likely you can still buy the item, but at a lower quantity or even a lower quality.
So are you really keeping your money safe? Safe from inflation?
You are doing no good to your own income. Perhaps you are even depreciating your own value of money.
Coming back, yes it does differ with several type of insurance and not all insurance will give you a return, therefore do seek advice prior to deciding.
One thing for sure, insurance is for an unforeseen, unpredicted event in the future and it is used to protect you in those events. Hence it does keep you and your money safe.
Therefore, if you really have a safe place to keep your money, then you should not buy insurance.
Reason no 4: You do not need money.
Come on who does not need money?
Well, apparently a lot of people do think it that way. Maybe not expressively, but their actions do speak out. Let me elaborate.
Someone will give you money if you happen to get into an accident but you declined. When you actually might need the money for the hospital bills and medications.
Another example, someone will give money to your spouse and kids when you are not around anymore, but you declined that offer. You might be a sole breadwinner and all inflow of money came from you but that situation no longer exists as you have passed on.
One last example, you will be given money if you were diagnosed with an illness but you refused that offer. Your family will be the one that has to pay for your medications, as you are unable to work anymore. They need to work hard just because you do not want the money.
Therefore, if you do not need money, then you should not buy insurance.
Reason no 5: You can foresee the future.
Foreseeing the future is one thing that will definitely help mankind. Imagine if we can foresee that a natural disaster was coming and all the lives that will be saved.
Unfortunately, the fact is, that we cannot foresee the future. We do not even know what will happen in an hour. Yes maybe we could decide what we want to do, but not everything is under our control.
If we would know that we would get diabetes or heart attack, we will definitely start taking care of our health. Eat more vegetables, cut on fried foods or start exercising.
If we knew that we would get into a car accident, you will do everything to prevent that from happening. You might wear protective gear, sell off your car or even not go out of your home at all.
So if you happen to be able to foresee the future, then you should not buy insurance. You will be able to save yourself and your family from any bad events in life.
There you go, a different perspective on insurance
There you go, 5 reasons to why you should not buy insurance.
In this high cost of living environment, the room for failure, accidents and unfortunate events is superbly small.
Not having insurance will affect your lifestyle and it is not an easy task to downgrade your lifestyle. Not having insurance will not only affect you but everyone around you as well.
Therefore, plan ahead and start somewhere. It is cliché but you will never know you need until it is too late.
Hope that this article was useful. Do share it with your family and friends. Till next time.
Disclaimer:
I am a financial adviser but I am not your financial adviser. Therefore, what is posted on this website, are my opinions and NOT to be taken as financial advice. Information provided might be relevant at this period of time but may be irrelevant due to alterations to rules, regulations or policies. The information provided is true to the best of my knowledge, but there maybe omissions, errors or mistakes.
