JOBSEEKERS
EMPLOYERS

Insurance vs. Risk

Natalie Chen - 17/10/2018
insurance

As a headhunter in the insurance industry, I am often asked questions about life insurance, such as what life insurance to buy and when to buy. As a woman born in the 1980s, I’d like to teach and guide young people.

First, what is the purpose of buying insurance?

There are two things beyond the control of a man in his life, no matter how rich and how capable he is: illness and accident!

Personally, I think the purpose of buying insurance is to instantly transfer the risk of accidents at these moments in life.

Next, when is the best time to buy insurance?

The later, the less cost-effective.

We always think insurance is expensive and we are still young, so we can wait. In fact, the longer you wait, the more expensive it becomes. In the end, you will become ineligible to buy some insurances. Apart from the ridiculously expensive premiums, you will be rejected only because of your old age. Insurance companies generally set the age limit at 60 or 65.

As you get older, premiums go up.

When the insured is older than 60, the premiums can easily go higher than the amount covered, particularly when it comes to major disease insurance and life insurance products. The range of options is limited that only some accident insurance products and those insurance having nothing to do with health are available to the insured. Products like critical illness insurance, cancer insurance, medical insurance, which are most needed by the elderly, will be unavailable. If you insure yourself when you are young, you can have more options. In addition to the cost-effective products, premiums are much cheaper.

The older you are, the shorter the insurance you can enjoy, and the higher the premiums are.

For example, the most popular critical illness insurance will last till you are 65. If you insure yourself at 20, you can enjoy the insurance for 45 years; if you insure yourself at 40, you can only enjoy the insurance for 25 years. In fact, to put it simply, buying insurance is preparing for a rainy day, so that we are free from the ups and downs caused by risks in life.

For people younger than 29, insurance is the cheapest in life;

People in the 30-40 age range cannot wait any more, because the premiums increase sharply;

People in the 40-55 age range are mostly in suboptimal health, so the sum insured is limited in addition to the health examination;

When you are 55-60, even if you are healthy, due to the age limit, not only are premiums expensive, the range of choices is much narrower. At this point, many cost-effective products will be unavailable, even if you are willing to pay for them.

The interesting thing about insurance is you have to pay first and enjoy the service later. As a result, when you're still young and healthy enough to be eligible for insurance, don't wait to see, because risks don’t wait.

Senior Consultant | Banking & Financial Services Recruitment
+86 21 2287 3101
nchen@morganmckinley.com