Economic Wisdom to Apply in Your Twenties

Chapter 43

Chapter 5 Section 7 Buying an insurance policy for yourself and your family

Xiaomei, 26, is the only child in her family.Xiaomei’s parents were laid off a long time ago, and her mother was in poor health. For many years, she relied on her father to do odd jobs to maintain a difficult life. Xiaomei insisted on part-time work and study during her four years of college life, until she graduated last year and entered a foreign-funded enterprise. With a good salary, the family finally breathed a sigh of relief, and the parents don't have to work so hard anymore, and are ready to enjoy their old age in peace.

However, a sudden car accident caught Xiaomei's family by surprise.Xiaomei was seriously injured in a car accident, and the huge medical expenses made Xiaomei's parents helpless.When helpless, the staff of the insurance company came to Xiaomei's house and sent the insurance compensation in a timely manner.

It turned out that Xiaomei purchased 20 yuan of accident insurance on the advice of a life insurance planner shortly after she started working.Fortunately, there is 20 yuan in compensation, which solves Xiaomei's urgent need for medical expenses.

Maybe she didn't have a specific understanding of insurance when she bought insurance, but Xiaomei really felt the true value of insurance when her life was dying.

We are no strangers to the word "insurance".Insurance is an economic form in which the economic relationship between the two parties is established in the form of a contract, and the insurance fund established by paying insurance premiums provides economic compensation or payment for losses caused by disasters and accidents within the scope of the insurance contract.

As everyone knows, the occurrence of an accident is a matter of probability, and buying insurance is to admit the existence of this probability.In essence, the purpose of buying insurance is to reduce the impact on individuals, families and society after accidents that may occur in future life or within a period of time.

From an economic point of view, insurance, as one of the oldest risk management methods, is to ensure the stability of economic life. For the losses caused by specific dangerous accidents or specific events, the use of the collective power of most units, according to reasonable Compute, jointly build a fund.In layman's terms, it's like in a family, if a family member has an accident, they will ask relatives and friends to help.But relatives and friends are limited, and the help they can provide is also limited, so we have social insurance.

Some young people like aggressive investment methods, and cash investment always likes to be linked to the rate of return. Therefore, it is difficult for them to catch a cold with insurance investment.But the advantage of insurance lies not in the level of return on investment, but in its protection function.Insurance is like the foundation of a financial pyramid. Only when sufficient protection is prepared for oneself can other financial plans be realized one by one.As long as the annual premium paid is within a reasonable income ratio, insurance will not have any impact on your overall investment plan, and it can also protect venture capital.When venture capital fails, you are fully capable of falling down and getting up again; when risks such as accidents and diseases come, buying enough insurance will not affect your continuation of venture capital.

At the same time, experts remind that the choice of insurance must be cautious.Insurance is not an ordinary commodity. If you buy a piece of clothing or a set of furniture, you don’t need to wear it or don’t use it if you don’t like it, or you can give it away; but insurance cannot be transferred.Some people buy insurance because the salesperson is a friend or relative, and they buy it because of their sympathy; or they don’t read the terms, just listen to the introduction, and blindly believe it. After buying, they find that it is not suitable for them, and the insurance is very troublesome. .Therefore, when we choose insurance for ourselves and our family, we should pay attention to collecting information extensively, choose the most suitable insurance according to the actual situation, and let it build a worry-free city wall for our life.

Wisdom Pieces: Three Questions to Pay Attention to When Buying Insurance
1. Understand the insurance company
Insurance companies are financial companies that operate risks. The Insurance Law stipulates that insurance companies are not allowed to be dissolved except for division and merger.That is to say, for insurance to provide decades of service, the strength, reputation, terms, and after-sales service of the insurance company are crucial.Before buying, you should understand the company, such as economic nature, registered capital, business development, claims settlement, etc.

2. Buy insurance according to your income

When buying insurance, you should rationally purchase appropriate insurance according to your age, occupation, income and other actual conditions, so that you can afford it for a long time financially and get the protection you deserve.

3. Not every young person needs life insurance

Life insurance is to protect the life of family members.In other words, life insurance protects people who live on the income of others.If no one depends on you to live, basically you don't need to buy life insurance, you should buy medical insurance or accident insurance.

(End of this chapter)