Which insurance should be the first in our life?

There are many questions about life insurance. Should I buy it because it is life insurance? Or which one is the effective risk management tools and can be used for tax reduction or as known as saving? Some might say that it is not necessary because medical check-up is required, high premium and it is worthless. 


However, some people are hesitant and afraid to buy life insurance because of its complications, especially the first life insurance that should be understood, conditions, contracts and etc. The most important reason is they do not know which one should be the first. 


Moreover, employees with insurance welfare from companies may have a hard time thinking about whether they should buy a personal one or not.

Therefore, before buying life insurance, better ask yourself how ready you are, especially anyone who has a family and kids. Buying life insurance is necessary to ensure and reduce the effect of risk in case the insured dies. This means the first life insurance that you should buy is whole life insurance which covers the insured death with an unlimited period and low premium compared to the sum insured.  


So, the life insurance company will cover the insured as shown in the contract from the first day until death. In case death happens, they will be paid as indicated in the insurance policy. The insurance period may be defined as 85-year-old or 95-year-old depending on each insurance company. 


There are 2 types of the whole life insurance based on the premium payment session as following,


1.. One-time premium payment; The insured pays only one time at the first year.


2. The premium payment as in installment plan; The insured pays as a fixed-time installment plan whether 10-year, 15-year or 20-year, etc. Otherwise, the insured age also can be the indicated installment plan such as paying until reaching 50, 55, 60-year-old, or as long as the policy covers.  

The reason why the whole life insurance should be your first insurance
 

It is easy, not complicated with long-term coverage and no need to re-contract. If no mis-condition happens, the coverage will last as indicated in the policy.


As there is a fixed-payment term so the premium is low compared to its worthiness and coverage period. Moreover, the premium is fixed from day one until the end of the contract which means the premium will not be higher regarding age. So, it is good for any one with low income or in a start-working period. 


Furthermore, you can buy an add-on for life insurance at any time along the contract depending on if your income is higher and extra health coverages are needed. Also, it can be used for tax deduction not over 100,000 Baht per year. 


The whole-life insurance condition
 

For those who want to cancel the contract before the indicated time, you may get a small number of money back and still have to continue paying the premium in case you select the installment payment plan which may affect once you have a low income or are unemployed.


So, the question is how much you should pay for whole life insurance. The answer is it depends on your annual income. In the start-working period with a low income, you should start from a small coverage such as 500,000 Baht with a premium of 10,000 Baht per year. Then moving to the next level when your income is growing. For example, a million Baht coverage with 20,000 Baht premium per year.


Therefore, whole-life insurance will help you reduce the stress of himself/herself and alleviate the family's financial problem. The benefit from the coverage can be used in their daily life mortgage, the death funeral expenses and also paying off debts.