Timothy Tiah (avatar)
updated 10 months ago

In a recent Dayre entry @jiayenlim actually asked me what made me not believe in insurance previously.

I thought I finally addressed that here now since I have a little bit of time.

The thing is that I didn't not believe in insurance. Heck I've been buying insurance for years. But I view it as coverage for a bad event happening, instead of an insurance. So I don't buy annuity plans or those investment linked ones. But just pure medical or property coverage stuff.

And I keep the premiums generally low (which then means a correspondingly lower coverage limit too).

You'll be surprised at the stuff I buy insurance for and the stuff I don't. I buy a little bit of medical insurance for shorty and myself.

I don't buy insurance for my car other than the mandatory 3rd party one. That means If my car gets stolen or knocked, it's all on me. I take that risk.

I buy insurance for business though. Like since we invested lots of money in Colony we insure it for

Fire damage or stuff like that. It as in the fixtures and fittings and all.

I've also got this mandatory insurance for a property I own cuz the management body requires us all to buy it. And a couple years ago I had some flooding there and was able to claim some.

So it's not that I don't believe in insurance or don't buy insurance. It's just that I use it with personal risk preferences.

Updated my blog!

Day 252

Saturday, 9 Sep 2017

135 1
jiayenlim (avatar)

jiayenlim Hi @timothytiah Of late, I've been studying on people's belief and behavior on life insurance, hence the question. While I meet people who buy insurance because they think insurance will be of great help, some despise insurance like it cheats their money. Some may buy because they are pressured to by agents, some procrastinate but when they finally wanted to take up the coverage, they are not entitled to it anymore.

Insurance is about transferring the risk to a third party who can stomach the risk at a lower cost and it gives a person a certain amount of assurance (monetary) when something unfortunate happen. I used to be ignorant about insurance until lately..cause the rising medical cost scares me. I may not be able to fork out..say 200k (or more) if I ever fall ill. And even if I can afford it, I wouldn't want to cause I would rather spend my money on other living expenses than paying off hosp bills. So if I can afford a small premium just so to get myself covered and put my mind at ease, i would do so. The same goes for life/ critical illness (CI) coverage, getting paid in the event of death/ CI diagnosis actually comforts me because I know there would be a good amount of money as a backup fund (be it for myself or for my family) in the event smth bad happen.

Every individual has its own way of managing its risk. And there is no wrong or right in choosing what is best for oneself. It's all based on how an individual weighs and values what is good to them. If at all any individual is able to cover its entire risk impact, then insurance may not be needful. Thank you for letting me know your view on this subject, i really appreciate it.

10 months ago

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