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To understand insurance, we must start with its origins, examining why it arose, how it came to be, and how it developed. Since ancient times, humanity has continuously battled against the merciless forces of water and fire, as well as the unpredictable weather, adhering to the belief that "my fate is determined by me, not by heaven." In this ongoing struggle, the idea of insurance to cope with disasters naturally emerged, leading to the formation of primitive forms of insurance. For instance, throughout various feudal dynasties in China, there was a strong emphasis on stockpiling grain to prepare for famine. The "Book of Rites: The Royal System" suggests that if a state could save one-third of its annual grain harvest for three consecutive years, it would have enough food to last for three years, thus ensuring that even in years of natural disasters, the common people would not go hungry. Additionally, historical records indicate that ancient Egyptian stonemasons and Roman soldiers had mutual aid organizations that collected dues from members, providing funeral expenses or compensation to the families of deceased members.

Among various types of insurance, maritime insurance is the earliest. The development of human history has always been closely linked to the sea, and it was the prosperity of maritime trade that led to the emergence of maritime insurance. As early as the late 11th century, cities in central and northern Italy, such as Pisa, Florence, Genoa, and Venice, had already developed forms of maritime insurance similar to modern ones. The first truly modern insurance policy in human history appeared on March 24, 1384, covering a shipment of goods transported from Arles in southern France to Pisa, Italy, known as the "Pisa Policy." Why is it considered modern? Because this policy clearly defined the insured items and liabilities, such as losses to ships and cargo due to maritime accidents, piracy, abandonment, capture, retaliation, and raids, which align closely with the framework of modern insurance.

The Pisa Policy insured maritime cargo, and later, personal insurance emerged, which insured individuals. Personal insurance also originated from maritime insurance. In the late 15th century, European slave traders insured African slaves transported to the Americas as cargo. If a slave suffered an accident or died during transport, the insurer would provide financial compensation, marking an early form of personal insurance. The first formal life insurance policy appeared in England in 1536, when a man named Martin insured a person named Giming for £2,000, with a coverage period of 12 months and a premium of £80. If Giming died within those 12 months, Martin would pay his family £2,000; if Giming survived, Martin would keep the £80 premium. Why was it £80 and not £100? How could one accurately "price" each individual? In 1693, the famous astronomer Halley compiled the first life table based on mortality statistics categorized by age from 1687 to 1691 in Breslau, Silesia, Germany, accurately showing the mortality rates for each age group, providing a basis for life insurance calculations. In the 1840s, mathematician James Todd proposed the "equitable premium theory" based on Halley's life table, further promoting the development of personal insurance.

In 1762, Todd and Simpson jointly founded the world's first life insurance company—the Equitable Life Assurance Society in England. Since then, the insurance industry has rapidly developed. By the 19th century, insurance entered a modern era, with the scope of coverage expanding beyond traditional property loss and personal injury to include life insurance, liability insurance, credit insurance, and reinsurance. More and more individuals and organizations joined the industry, providing various types of coverage and services for different insurance subjects.

From the origins and development of insurance, we can conclude that the birth of insurance is inevitable. As long as there is a need for protection, whether for objects or individuals, there will be institutions established to meet these insurance needs. Essentially, ancient insurance and modern insurance do not differ significantly; the distinction lies in the fact that modern insurance has become more diverse and standardized after years of development. Today, humanity has entered the 21st century, and insurance has become one of the three pillars of finance, alongside banking and securities, becoming an indispensable part of our lives.

What is insurance? What is its purpose?#

Insurance is essentially a contract that clearly outlines the rights and obligations between us and the insurance company. Rights and obligations are reciprocal; as consumers, our obligations mainly involve how much we need to pay the insurance company each year and for how many years. Correspondingly, the insurance company's obligations include what coverage it will provide and for how long. All this information regarding rights and obligations is clearly stated in the insurance contract.

In simple terms, the purpose of insurance is to provide us with a sum of money to cope with risks, such as accidents or illnesses, when they unexpectedly arise. Depending on the coverage, we can categorize insurance into different types. For example, life insurance is directly related to our lives, critical illness insurance is related to serious diseases, and accident insurance is related to accidents, etc. I will introduce each type one by one later.

As an important part of family financial planning, it is interesting that some so-called financial experts often separate insurance from financial planning, simply believing that financial planning is merely about preserving and increasing asset value, with no relation to insurance. Little do they know, this is a misunderstanding that equates investment with the entirety of financial planning, while investment is just one segment of financial planning.

The correct financial planning concept, especially for family financial planning, starts with setting aside emergency funds for unforeseen needs, followed by purchasing suitable commercial insurance to build a family financial protection system, and only then considering investment opportunities. This is akin to ensuring a solid foundation before constructing a skyscraper; otherwise, no matter how high or magnificent we build it, any slight disturbance could lead to a collapse, resulting in a total loss.

Therefore, insurance can be said to be an indispensable core foundation of our family financial planning system. When you think insurance is not urgent and can be delayed, risks may have already arrived unexpectedly. When misfortune truly strikes, you may suddenly realize the importance of insurance, but it may be too late, as you may no longer meet the insurance company's underwriting requirements. Such tragedies have occurred far too many times in our lives, and each time it is met with a sigh.

In the following chapters, I will systematically explain and clarify the insurance knowledge that is most closely related to us in as concise and understandable language as possible. Please believe that after reading this book, you will have a comprehensive understanding of insurance, and in the future, you will be able to purchase insurance clearly and confidently, without being led by the nose by insurance salespeople.

As the saying goes, "A meal should be eaten one bite at a time, and a journey should be taken one step at a time." Let’s first understand the functions of insurance. The fundamental function of insurance is protection, while its upgraded function is responsibility.

First, let’s look at protection. What does it protect? It protects our future lives from being thrown into "the abyss" by sudden disasters. I believe everyone has heard the saying, "Happy families are all alike; unhappy families are each unhappy in their own way." Many families fall into poverty due to illness or return to poverty due to illness. When misfortune strikes, they can only sell their cars and houses to raise funds for treatment, even dragging their family members into debt.

If we can plan early and arrange insurance for our families in advance, these risks can be transferred to the insurance company, leading to vastly different outcomes from two different choices!

Now, let’s talk about responsibility. Whose responsibility? Your responsibility! Responsibility to whom? Responsibility to your family! If you have an elderly mother to support, a three-year-old child to raise, a stay-at-home wife, and a mortgage of hundreds of thousands or even millions to pay off, and then you suddenly pass away, how will this family, relying on your income to live, survive? Moreover, they are the people you love most in this world.

If you are in such a family situation, knowing that your responsibilities are heavy but still harboring luck, not providing yourself with adequate protection, you are no different from a gambler who drives without a seatbelt, betting your life on it.

Therefore, if you do not want your happy life and that of your family to be interrupted by unexpected accidents and unpredictable diseases, we must plan ahead, conduct scientific insurance arrangements based on actual economic conditions, and prevent problems before they arise.

This is the role of insurance; it can ensure that our lives and those of our families are not disrupted or even overturned by sudden risks.

There are many classifications of insurance; here are a few common ones.#

1. Classification by Nature of Insurance
   Using this method, we can divide insurance into social insurance, commercial insurance, and policy insurance.

(1) Social Insurance#

This refers to mandatory insurance implemented by the state to promote certain social policies and enhance certain welfare benefits through legislation. For example, the well-known "five insurances" are social insurance, including pension insurance, medical insurance, work injury insurance, unemployment insurance, and maternity insurance. Due to its mandatory nature, this type of insurance currently has the highest penetration rate in China.

(2) Commercial Insurance#

Commercial insurance refers to insurance contracts signed for profit, operated by specialized insurance companies. The policyholder and the insurance company sign an insurance contract, agreeing on the rights and obligations of both parties. For example, the policyholder must pay premiums on time each year, while the insurance company is responsible for compensation in the event of an accident, helping the insured through difficult times. The main difference between commercial insurance and social insurance is that social insurance has a certain degree of mandatory and welfare nature, while commercial insurance is a market behavior, and the establishment of commercial insurance companies is profit-driven. Of course, do not think that commercial insurance is bad just because it has the word "profit" in it; the emergence of commercial insurance injects vitality into the insurance market. To survive in the market, insurance companies must develop products that offer more comprehensive coverage at lower prices. Therefore, in terms of diversity of categories, commercial insurance is unmatched by social insurance.

(3) Policy Insurance#

Policy insurance is a type of insurance that people may have less exposure to, referring to insurance forms that the government promotes through policies to achieve certain policy objectives using insurance mechanisms. The biggest difference between policy insurance and commercial insurance is that commercial insurance is profit-driven, while government-promoted policy insurance uses insurance mechanisms to achieve certain policy objectives, such as agricultural insurance and export credit insurance.

2. Classification by Insured Subject#

By distinguishing different insured subjects, we can roughly divide insurance into personal insurance and property insurance.

• (1) Personal Insurance
  As the name suggests, it is insurance that covers a person's life and health, including life insurance, health insurance, and accident insurance. Life insurance in personal insurance is insurance that covers a person's life, including term life insurance, whole life insurance, survival insurance, and endowment insurance.

Health insurance covers our personal health, commonly including critical illness insurance, medical insurance, disability income loss insurance, and nursing insurance. If the insured suffers economic losses due to health reasons, the insurance company will pay a certain amount of insurance money for compensation. Accident insurance refers to insurance that compensates the insured or beneficiaries for death or disability due to accidental incidents, according to the terms of the insurance contract. To determine whether an incident is an accident, we only need to check if it meets four criteria: "sudden, external, unintended, and non-disease." For example, traffic accidents mostly qualify as accidents, while a cold does not, as it is classified as a disease.

• (2) Property Insurance
  Property insurance covers various physical properties and related interests owned by legal persons or natural persons. It compensates for property losses due to accidents with money or physical assets. Property insurance includes property loss insurance, liability insurance, and credit guarantee insurance. In fact, the concept of property insurance can be broadly or narrowly defined. Broadly, property insurance includes property loss insurance, liability insurance, credit insurance, and guarantee insurance; narrowly, we can simply refer to it as property loss insurance. In daily life, the property insurance we usually encounter generally refers to home insurance that protects household finances or home damage, as well as car insurance that protects vehicles.

3. Classification Based on Financial Functionality#

Since its inception, insurance has evolved from merely providing protection for various subjects to also offering functions for asset preservation and appreciation. Based on whether it has financial functionality, insurance is often divided into protection-type insurance and financial-type insurance.

In simple terms, protection-type insurance is solely responsible for protection, representing the most original and pure form of insurance. Financial-type insurance, on the other hand, adds functions for asset preservation and appreciation on top of risk protection. Some insurance products only offer financial functions without providing any personal protection.

Products like participating insurance and universal insurance often come with some protection-type products, such as life insurance and critical illness insurance. This way, while protecting against death and critical illness risks, the premiums we pay also have a certain preservation or appreciation function. Purely financial products, such as annuity insurance, education insurance, and pension insurance, can be viewed as a separate type of "financial product."

As for why financial insurance was so disliked in the past, it is actually because, despite the changes, the essence remains the same. As long as we grasp these three classification methods, we can quickly categorize any type of insurance product we encounter in the future and swiftly determine whether a particular insurance product can meet our needs.

Which insurances must be purchased?#

Modern insurance can be broadly divided into personal insurance and property insurance. Let's take a look at the types of insurance we need to configure throughout our lives, what their protection functions are, and what significance they hold for our finances and lives.

1. Personal Insurance#

(1) Life Insurance
The first type I want to share is life insurance, as it holds significant meaning for a family. We will mainly discuss three aspects: What is life insurance? How to determine the amount of life insurance? Which type of life insurance is more suitable for everyone?

Life insurance is short for life insurance, which is insurance that covers a person's "life and death." In simple terms, it means that if a person passes away, compensation is paid, generally covering death due to illness, accident, or natural causes.

The reason I first explain life insurance is that it reflects family responsibilities, especially important for the economic pillar of the family. If the economic pillar of the family passes away unexpectedly while still needing to repay a mortgage and raise children, although a person cannot be brought back to life, the surviving spouse, children, and parents can still receive a substantial insurance compensation from the insurance company.

With this money, the family can continue to pay the mortgage and cover children's education, allowing the family's life to proceed normally, avoiding a second blow to their material life after suffering emotional trauma.

Therefore, the practicality of life insurance is beyond doubt. Even if your current income is not high, as long as you bear these family responsibilities, you must configure it as soon as possible.

So, how much life insurance should we choose for ourselves?
Here, I will introduce the concept of "insurance amount." In simple terms, the insurance amount is the amount we can claim from the insurance company when a risk occurs. For example, if the life insurance amount is 1 million yuan, if the insured person unfortunately passes away, the beneficiary of the policy can claim 1 million yuan from the insurance company.

Generally, the life insurance amount needs to cover four gaps.
Gap 1: Family debts, including unpaid mortgages, car loans, private loans, and other personal debts.
Gap 2: Family daily living expenses, generally suggesting reserving 100 times the family's monthly expenses. If your family usually spends 4,000 yuan per month, this gap would be at least 400,000 yuan.
Gap 3: Future education expenses for children. The younger the child, the higher your educational expectations for them, leading to a larger gap. Therefore, this gap varies significantly among families, needing at least 200,000 yuan at a minimum, and potentially up to 2 million to 4 million yuan, with no upper limit.
Gap 4: Parents' support fees. Some parents live in rural areas without a fixed pension income and need to rely on their children's income for support, which should be carefully considered when planning life insurance. This part should also be reserved according to each family's actual needs.

The total amount of these four gaps, minus all the family's liquid funds, constitutes the family's life insurance protection gap. For example, if the total amount of the four gaps is 2 million yuan, and the family's bank savings and financial products total 500,000 yuan, then the family's life insurance protection gap is 1.5 million yuan.

Once we clarify how much life insurance we should configure, let's look at which type of life insurance we should specifically choose. Life insurance can generally be divided into three main categories: term life insurance, whole life insurance, and endowment insurance.

Term life insurance, as the name suggests, only covers a fixed period, for example, until the age of 60. If the insured person passes away before 60, the insurance company pays; if they pass away after 60, there is no payout.

Whole life insurance, on the other hand, pays out regardless of how old the insured person is when they pass away, as long as they have been insured.

Endowment insurance means that if the insured person unfortunately passes away during their youth, the insurance company will pay the life insurance amount. When the insured person is older and has fewer family responsibilities, this insurance transforms into a retirement savings insurance, or at a certain age, the full premium is returned for use as retirement funds.

Which type of life insurance is more suitable for most people?
Generally, it is recommended that everyone choose term life insurance. Although the insurance period does not cover a lifetime, it is cost-effective, allowing you to obtain the highest coverage at the lowest cost, and the coverage period is flexible, perfectly meeting our needs.

For the economic pillar of the family, the age range that most needs life insurance protection is between 30 and 60 years. Most people will have expenses related to mortgages, car loans, marriage, children's education, and supporting parents during these 30 years, making this stage the most financially stressful period of life.

However, most people after 60 will have paid off their mortgages, their children will have graduated and started working, and their own parents may have passed away. At this point, their family responsibilities will be significantly reduced, and they will only need to support themselves. Even if they unfortunately pass away at this time, it will not have a significant impact on the family's finances, so having life insurance becomes less important.

Therefore, the key to buying life insurance is not how long the insurance period should be, but whether the coverage during that period is the most critical stage for us. Generally, coverage until around 60 years old is sufficient, but the key is that the insurance amount must be adequate.

As for whole life insurance and endowment insurance, everyone will eventually die. For these types of products, the probability of claims for the insurance company is 100%. The actuaries of the insurance company are not idle, so we should not think we can take advantage of the insurance company. Unless one dies early, purchasing these types of insurance will definitely result in a loss.

Life insurance is only related to life or death. As long as the insured meets the health requirements of the insurance company at the time of application, there will generally be no disputes. For this relatively simple insurance, we can directly compare prices when selecting.

To be honest, among all the types of insurance, life insurance is the most suffocating one. Because it is the only insurance that is definitely unrelated to you personally; when you win this insurance "gamble," it means you are leaving this world.

In other words, buying life insurance is not for self-love, but for the love of others, for those you cherish the most.

Therefore, I strongly recommend the following four groups of people to not take chances and to purchase life insurance as soon as possible.

• The first group is married individuals whose partners do not have a job or have a low income.

• The second group is divorced individuals who are raising children alone.

• The third group is those with high mortgages that have not been paid off.

• The fourth group is unmarried individuals without children, with no significant debts, but whose parents live in rural areas without urban social security pensions or medical insurance.

(2) Critical Illness Insurance#

If life insurance is an important symbol of an adult's responsibility to their family, then critical illness insurance is a symbol of a person's responsibility to themselves.

So, what exactly is critical illness insurance?

Critical illness insurance is a type of insurance that provides a lump sum payment when the insured is diagnosed with a specific critical illness. Common critical illnesses include malignant tumors, acute myocardial infarction, and sequelae of stroke.

For example, if someone buys critical illness insurance with a coverage amount of 500,000 yuan and is unfortunately diagnosed with cancer, they can claim 500,000 yuan from the insurance company in one lump sum.

The biggest advantage of critical illness insurance is that the compensation can be used at the insured's discretion, whether for treatment or for other expenses, such as covering family living costs.

The compensation from critical illness insurance can primarily solve three problems:

1. Medical expenses: Medical treatment costs can be overwhelming for most people, especially for critical illnesses, making this money crucial.
2. Loss of income due to illness: Unlike a common cold, which can be treated with a shot and a day of rest, a critical illness often requires long-term treatment, leading to significant income loss during recovery. If the sick person has not saved enough, daily expenses, children's education, and monthly mortgage payments can become problematic.
3. Rehabilitation costs: Individuals who have suffered from critical illnesses often require extensive rehabilitation and nutrition, which also necessitates financial support from critical illness insurance.

How much should one spend on critical illness insurance?
Honestly, there is no upper limit. Given the current price levels and medical expenses in China, at least 500,000 yuan of critical illness insurance coverage is necessary. If possible, it is advisable to configure more, as we will face inflation and medical inflation risks in the future.

Unlike life insurance, critical illness insurance comes in various forms, including cancer insurance and insurance covering 100 types of critical illnesses, making it relatively complex.

The first confusion people face when selecting critical illness insurance is: how many types of illnesses should I cover?

Actually, this question does not require too much worry. In 2007, the China Insurance Industry Association and the Chinese Medical Association jointly established the "Standards for the Use of Disease Definitions in Critical Illness Insurance," which stipulates that critical illness insurance must cover six mandatory critical illnesses and 19 recommended critical illnesses.

• 1. Malignant tumors (excluding some early-stage malignant tumors)
• 2. Acute myocardial infarction
• 3. Sequelae of stroke (permanent functional impairment)
• 4. Major organ transplant or hematopoietic stem cell transplant (must be allogeneic transplant surgery)
• 5. Coronary artery bypass surgery (also known as coronary artery bypass grafting) (must be open-heart surgery)
• 6. End-stage renal disease (also known as chronic renal failure in uremic stage) (must require dialysis treatment or kidney transplant surgery)
• 7. Multiple limb loss (complete severance)
• 8. Acute or subacute severe hepatitis
• 9. Benign brain tumors (must require craniotomy or radiation therapy)
• 10. Chronic liver failure in decompensation stage (excluding alcoholic or drug abuse-related causes)
• 11. Sequelae of encephalitis or meningitis (permanent functional impairment)
• 12. Deep coma (excluding causes related to alcohol or drug abuse)
• 13. Bilateral deafness (permanent and irreversible)
• 14. Bilateral blindness (permanent and irreversible)
• 15. Paralysis (permanent and complete)
• 16. Heart valve surgery (must be open-heart surgery)
• 17. Severe Alzheimer's disease (complete loss of independent living ability)
• 18. Severe brain injury (permanent functional impairment)
• 19. Severe Parkinson's disease (complete loss of independent living ability)
• 20. Severe third-degree burns (at least 20% of body surface area)
• 21. Severe primary pulmonary hypertension (with signs of heart failure)
• 22. Severe motor neuron disease (complete loss of independent living ability)
• 23. Loss of speech ability (complete loss and active treatment for at least 12 months)
• 24. Severe aplastic anemia
• 25. Aortic surgery (must be open-heart or open-abdominal surgery)

By 2021, the regulations were supplemented and revised regarding the above 25 mandatory critical illnesses, updating definitions and diagnostic standards, and adding three new critical illnesses and three mild illnesses.

The three new critical illnesses added are:

1. Severe chronic respiratory failure
2. Severe Crohn's disease
3. Severe ulcerative colitis

The three new mild illnesses added are:

1. Mild malignant tumors
2. Mild acute myocardial infarction
3. Mild sequelae of stroke

Since January 2021, newly launched critical illness insurance products will generally include these 28 critical illnesses and three mild illnesses, using the latest disease diagnosis requirements.

So, why are these specific diseases chosen?
Because these 28 critical illnesses and three mild illnesses have particularly high incidence rates. For example, among ten people with critical illnesses, about nine will have one of these 28 critical illnesses. Especially malignant tumors, or cancer, account for nearly 70% of all claims.

Therefore, understanding this point, we do not need to overly focus on the number of diseases covered when choosing critical illness insurance. If you are worried about critical illnesses outside of these 28 common ones, choosing critical illness insurance that covers more than 50 diseases will suffice.

Here, I need to remind everyone that some critical illness insurance products claim to cover 100 or even more diseases, but those rare diseases have extremely low incidence rates, which provides an excuse for insurance companies to significantly raise premiums. We should not be fooled by this.

It is advisable to compare critical illness insurance products in the market, aiming for the lowest premium for the same number of covered diseases; the more diseases covered for the same premium, the better. However, if a product is several hundred or even thousands of yuan more expensive than other competing products just because it covers a few dozen rare diseases, then we do not need to buy it.

Additionally, critical illness insurance has evolved to not only cover serious illnesses with low cure rates but many products now allow for the addition of mild and moderate illness coverage. The classification standards for mild, moderate, and critical illnesses are based on whether the disease poses a life-threatening risk according to current medical technology. If it is life-threatening, it is classified as a critical illness; otherwise, it is classified as a mild or moderate illness.

Their coverage amounts are lower than those of critical illness insurance, but the insurance periods are the same. Although the incidence rates of mild and moderate illnesses are higher than those of critical illnesses, the treatment costs and the impact on the family are much lower than those of critical illnesses. Therefore, whether to purchase critical illness insurance with mild and moderate illness coverage does not have a standard answer. If the price of the product with mild and moderate illness coverage is acceptable, it is fine to choose it.

In addition, some critical illness insurance products also have clauses for waiving premiums for mild and moderate illnesses. This means that if a mild or moderate illness occurs, the insured will not only receive an additional compensation but also, considering that many conditions may worsen into critical illnesses and affect the insured's future work income, the policyholder will not need to pay premiums after being diagnosed with a mild or moderate illness, and the insurance contract will continue to be valid until the end of the coverage period, such as until age 70 or for a lifetime.

This is also one of the reasons why it is advisable to choose the longest premium payment period. If the insured unfortunately suffers from a mild or moderate illness during the long payment period of 30 years, as long as the waiver clause is added, subsequent premiums will not need to be paid.

The longer the payment period, the higher the probability of waiving premiums. This is very beneficial for consumers, as most reputable products automatically include waivers for mild and moderate illnesses for the insured, and even if added separately, it does not cost much, so it is advisable to include it.

Moreover, like life insurance, critical illness insurance is also an important long-term protection insurance, and there is also the question of how long the coverage should last. The older one gets, the higher the probability of illness, and the lower the income level, making critical illness insurance even more necessary. Therefore, if conditions allow, it is advisable to choose lifelong critical illness insurance; if the budget is tight, consider coverage until age 70.

When it comes to payment methods, it is best not to choose a "lump sum payment" but to extend the payment period as much as possible, just like repaying a mortgage.

Every time insurance is mentioned on social media, followers often ask: what insurance has the highest cost-effectiveness? What insurance is most urgently needed? What insurance is most meaningful to us?

In fact, the answer is the same. That is to use the small amount of money you can afford to guard against risks that, while not very likely to occur, are not negligible, and once they do occur, can have particularly harmful consequences.

What insurance can simultaneously meet these three criteria and is the most important?

That is critical illness insurance, which fully meets these three standards.

First, the money spent on critical illness insurance is not much; second, it is not impossible to suddenly be diagnosed with cancer one day, and the probability increases with age; finally, once a critical illness occurs, the entire family will fall into an irreversible tragedy.

Therefore, for individuals, critical illness insurance is the most important among all types of insurance.

(3) Hospitalization Medical Insurance#

Critical illness insurance provides a lump sum payment once the critical illness criteria are met, primarily used to cover medical expenses, loss of income, and other additional losses.

Next, let's discuss another insurance related to illness—medical insurance. When we talk about medical insurance, we specifically refer to hospitalization medical insurance, commonly known as million-dollar medical insurance in recent years. Its protection function is actually very similar to that of critical illness insurance, mainly covering disease risks.

Compared to critical illness insurance, one obvious advantage of medical insurance is that the reimbursement limit is very high. Most medical insurance on the market can reimburse hundreds of thousands of yuan for hospitalization expenses, and unlike critical illness insurance, it does not have disease restrictions. As long as the hospitalization expenses are reasonable and necessary, it covers all diseases, making it seem like a very "universal" insurance at first glance.

Moreover, for adults, the cheapest long-term critical illness insurance costs several thousand yuan a year, while medical insurance only costs a few hundred yuan a year, making medical insurance seem extremely affordable in comparison. Thus, many people often ask if we can replace critical illness insurance with the "higher cost-effectiveness" medical insurance.

Hold on, let's analyze this deeply.

Critical illness insurance is a benefit-type insurance, meaning it pays out the agreed amount as stated in the contract. Most are advance payment types; for example, if Xiao Ming buys critical illness insurance with a coverage amount of 500,000 yuan, as long as the hospital issues a report confirming that Xiao Ming indeed has stomach cancer, the insurance company will immediately transfer 500,000 yuan to Xiao Ming's bank account.

This means we have a choice; for example, knowing that the disease is incurable, we might still want to use this 500,000 yuan to fight for a chance. Or, if we know the disease is indeed hard to treat but do not want to give up, we can first use this money for treatment, and when the condition worsens and we do not want to waste more money, we can leave the remaining 200,000 or 300,000 yuan for our family to use for future living.

However, the reimbursement method for medical insurance is different; it is a reimbursement-type insurance. For those with tight finances, this means they must first gather a large amount of medical expenses upfront and only after treatment can they take the invoices to seek reimbursement from the insurance company.

Additionally, medical insurance has three notable issues.

First, million-dollar medical insurance generally has a deductible, for example, a deductible of 10,000 yuan, meaning that if the medical expenses after social security reimbursement are less than 10,000 yuan, there will be no compensation. Ordinary outpatient visits and minor ailments will not be reimbursed.

Second, although the current premium for medical insurance is much lower than that of critical illness insurance, the premium increases with age. The older one gets, the higher the premium, and by the time one reaches their 60s, they may have to pay several thousand or even over ten thousand yuan annually, accumulating total premiums far exceeding those of critical illness insurance.

Finally, the renewal of medical insurance is subject to the uncertain future of medical inflation. Currently, there are no ordinary million-dollar medical insurance products that guarantee long-term renewal; most are one-year contracts, with the best case being a 20-year contract. If the product is discontinued in the future, renewal will not be possible. This can lead to a fatal problem: if, in their 40s or 50s, a person has many minor health issues, and their long-term medical insurance suddenly stops, it will be difficult to find another medical insurance to continue.

Thus, medical insurance cannot replace critical illness insurance.

However, conversely, while medical insurance has many restrictions, it also has obvious advantages compared to critical illness insurance, namely, it is relatively inexpensive in the short term.

Additionally, medical insurance pays out as long as the insured is hospitalized for treatment. But going to the hospital is not always due to illness; it could also be due to an accident, such as being hit by a car or assaulted, requiring hospitalization and incurring expenses that meet a certain standard. In this case, medical insurance can also provide compensation.

This means that medical insurance also covers medical expenses due to accidents, effectively serving part of the role of accident insurance, thus broadening the coverage. Therefore, critical illness insurance cannot fully replace medical insurance.

Since they each have their own characteristics and cannot replace each other, when should we buy critical illness insurance, and when should we buy medical insurance?

It’s simple; it depends on how much money we have. For those with limited income, it is advisable to buy the few hundred yuan medical insurance to save money, but they should be aware of the limitations of medical insurance and ensure they purchase critical illness insurance as soon as conditions allow.

For those with a certain economic foundation, it is best to configure both critical illness insurance and medical insurance, ensuring coverage for both major and minor illnesses, and not to lose sight of the bigger picture.

In modern parlance, medical insurance and critical illness insurance are a pair of ace partners that should not be separated; both should be configured to ensure more stable protection!

(4) Accident Insurance
Earlier, we discussed life insurance, critical illness insurance, and medical insurance in personal insurance. Now let’s talk about the last type of personal insurance—accident insurance.

There is an old saying, "It’s not the ten thousand that worries you, but the one in ten thousand." This "one in ten thousand" refers to accidents.

Everyone has the potential to experience an accident. Unlike life insurance and critical illness insurance, the cost of consumer accident insurance is very low; for a premium of a few hundred yuan a year, you can obtain accident insurance coverage of several hundred thousand yuan, providing high leverage and suitability for all ages.

I recommend that young people who have just entered society, after purchasing basic social insurance, should first configure accident insurance for themselves.

Next, let’s discuss the concept of accident insurance, how to determine the coverage amount, and how to choose accident insurance from three aspects, allowing us to achieve significant benefits with minimal expenditure.

Accident insurance, fully named accident injury insurance, refers to personal insurance that pays out based on accidental death or disability.

Accidental injuries are classified into three categories based on severity: accidental death, accidental disability, and accidental medical expenses.#

Accidental death directly pays the insured amount specified in the contract; accidental disability pays a proportion of the insured amount based on the level of disability; accidental medical expenses are the most common, simply referring to injuries caused by accidents that require hospitalization for treatment, regardless of severity, all counted as accidental medical expenses and can be reimbursed with hospital receipts.

In essence, accident insurance compensates for death caused by accidents, disability caused by accidents, and medical expenses incurred due to accidents. Some accident insurance even provides hospitalization allowances.

So, how do we determine the coverage amount for accident insurance?
I suggest calculating the coverage amount based on 5 to 10 times your annual income. Consumer accident insurance is highly cost-effective; a comprehensive accident insurance policy with a coverage amount of 500,000 yuan costs less than 200 yuan a year, making it affordable even for families on a tight budget.

Additionally, I recommend choosing consumer accident insurance that can be purchased annually. Avoid those that require a 10-year payment for a 30-year coverage period with a return of the principal at the end; we should not fall for those traps.

In summary, purchasing accident insurance is relatively straightforward. Once you confirm that the basic information is correct and meets your needs, simply choose the cheapest option under the same coverage conditions.

Specifically, when selecting accident insurance, focus on the following points:

1. Coverage for accidental death and disability: Ensure that the conditions for accidental death and disability are broad enough. Some products only cover traffic accidents, meaning compensation is only available if the accident occurs on a mode of transportation, while others cover all accidental injuries regardless of where they occur. Therefore, be sure to choose a product with a broader coverage range.
2. Accidental medical expenses: Pay attention to the reimbursement limits and deductibles when selecting accidental medical insurance. It is best to choose accident medical insurance with a reimbursement ratio of 95% to 100%, and also check whether the reimbursement for accidental medical expenses includes medications not covered by social security; if it does, that’s even better.
3. Consider your profession: While accident insurance generally does not have health requirements, it does have restrictions based on the insured's profession. The higher the risk level of the profession, the more difficult it may be to purchase accident insurance. For example, an office worker has a much lower probability of experiencing an accident compared to a "window cleaner" seen hanging from ropes outside a building.

In summary, the four types of personal insurance—life insurance, critical illness insurance, medical insurance, and accident insurance—are sufficient to cover over 90% of the disease and accident risks one may encounter in life.

2. Property Insurance#

Modern insurance can be broadly divided into personal insurance and property insurance. We have covered the main types of personal insurance, and now let's discuss property insurance, particularly home insurance and car insurance, which are most relevant to the general public.

(1) Home Insurance
Home insurance, formally known as household property insurance, is a type of insurance that covers tangible property. In simple terms, it is an accident insurance policy for your home and tangible assets inside it.

Many people overlook home insurance, thinking it is unnecessary. However, home insurance, which costs only a little over a hundred yuan, offers excellent value for money, and I recommend everyone purchase it as soon as possible.

Whether you own a home or rent one, it is advisable to buy home insurance. Especially for rental properties, tenants may not cherish the property as much as you do, leading to various issues, such as improper electrical wiring that could cause a fire, resulting in significant losses.

How should we choose home insurance?
Here are three suggestions:

1. The coverage range of home insurance is not the same, and the premiums vary. Generally, the broader the coverage, the higher the premium. However, this does not mean that the home insurance with the largest coverage is necessarily the best. It is advisable to carefully review the coverage range and exclusions of each type of home insurance and choose the one with the best cost-effectiveness based on your actual situation.
2. Insurance companies typically do not cover valuables such as gold and silver jewelry or antique collections, which are difficult to assess for actual value. If you need special coverage for these items, you must purchase specialized property insurance.
3. Generally, most home insurance policies exclude "earthquake" and "tsunami" as natural disasters. Therefore, if you live in an area with a high risk of earthquakes or tsunamis, it is better not to purchase this type of home insurance.

In summary, home insurance is a type of accident insurance that protects household property. Choose based on what you want to cover; the price is not too high, and the annual premium for protecting a house worth millions is only a few hundred yuan.

(2) Car Insurance
After discussing home insurance, let's talk about car insurance. Friends who own cars should pay attention when purchasing car insurance, as there have been many pitfalls in the past. It wasn't until the reforms in 2020 that car insurance became simpler.

Car insurance, formally known as motor vehicle insurance, is a special type of insurance that can be further subdivided into many types, including compulsory insurance, vehicle damage insurance, third-party liability insurance, no deductible insurance, driver liability insurance, passenger liability insurance, glass insurance, theft insurance, water damage insurance, spontaneous combustion insurance, scratch insurance, etc.

Among them, compulsory insurance is mandatory; if you do not pay it, it is illegal. If traffic police find that your car has not paid compulsory insurance, they can impound the vehicle on the spot.

Vehicle damage insurance is also basic coverage; it is important to note that the insured amount for vehicle damage insurance is the actual value of your vehicle, which depreciates every year. Therefore, the maximum insured amount for vehicle damage insurance will decrease each year, and the corresponding premium will also slightly decrease.

Third-party liability insurance is for when your car hits someone; the insurance company compensates you for the money you need to pay to the injured party. According to Chinese law, if you hit someone while driving, regardless of whether it is the other party's fault, you must pay some compensation.

In summary, compulsory insurance is a standard in car insurance, and in addition, the most important commercial car insurance packages are vehicle damage insurance and third-party liability insurance.

Now, where can we buy car insurance more cost-effectively?
In addition to traditional insurance companies, we can also purchase car insurance from some third-party platforms authorized by the state, such as Alipay and WeChat. Both Alipay and WeChat have mini-programs for selling car insurance, although the entry points are hidden. You need to search for them. The car insurance sold on these two platforms is generally very cheap and comes from well-known insurance companies. These large companies, due to their abundant resources, not only provide relatively fast damage assessment and rescue services after major accidents but also offer various value-added services.

The development of the internet has injected new vitality into the insurance industry and brought new opportunities for its growth. Ultimately, the beneficiaries are still the general public.

How to scientifically configure an insurance plan?#

Scientifically configuring an insurance plan involves reasonably arranging different types of insurance based on individual or family financial situations, living needs, and future plans to achieve effective risk diversification and maximize protection. Here are the steps and principles for scientifically configuring an insurance plan:

1. Assess your risk situation and needs#

First, determine what types of insurance you need based on your risk situation. Different groups, life stages, and professions face different risks, and insurance configurations need to vary accordingly. The main categories of needs include:

• Personal protection: For example, health risks, accident risks, longevity risks, etc.
• Property protection: For example, risks of property loss such as homes and cars.
• Income protection: For example, income interruption due to unemployment, disability, or inability to work.

2. Understand insurance types#

Common types of insurance include:

• Life insurance: Primarily used to protect the financial stability of the family after the death of the economic supporter. Includes term life insurance, whole life insurance, etc.
• Health insurance: Covers medical expenses due to illness or medical accidents, including hospitalization, outpatient, critical illness, etc.
• Accident insurance: Protects against injuries or deaths caused by accidents, usually with a broad coverage range.
• Critical illness insurance: Covers the diagnosis costs of specific critical illnesses, usually paying a certain amount upon diagnosis.
• Property insurance: For example, car insurance, home insurance, household property insurance, etc., protecting physical assets.
• Income protection insurance: Provides income protection for a certain period if unable to work due to illness or accident.

3. Configure based on priority of protection#

Prioritize insurance based on the level of risk. Generally, the following types are the most critical:

1. Health insurance: Health is the most fundamental protection, as the risk of illness is faced by everyone. Choose appropriate medical insurance and critical illness insurance based on your health status and financial capacity.
2. Life insurance: If the family’s finances depend on your income or if there is significant debt (like a mortgage), consider purchasing term life insurance or whole life insurance.
3. Accident insurance: If you face higher accident risks in your work or life, consider increasing accident insurance coverage.
4. Income protection insurance: If you are the main economic source for your family and do not have sufficient financial reserves to cope with unemployment or long-term illness, consider configuring an income protection insurance policy.

4. Ensure the coverage range and amount are reasonable#

• Coverage range: Choose the insurance coverage based on your living needs. For example, health insurance should cover common and acute illnesses, while critical illness insurance should include high-incidence critical illnesses.
• Setting the coverage amount: The coverage amount should be based on the family’s financial situation. Generally, living expenses, children’s education expenses, mortgage, and debts should be important factors in calculating the coverage amount.

5. Diversify risks and avoid over-insurance#

Avoid over-insurance, which means unnecessary multiple or duplicate insurance on a single item. A scientific configuration should minimize overlapping coverage and reasonably diversify risks across different types of insurance. For example, in health insurance, there should be basic medical coverage, and additional hospitalization allowances and critical illness insurance can be purchased to form a clear protection structure.

6. Rationally utilize the time and duration of insurance#

• Combine short-term and long-term: Term life insurance and accident insurance can be chosen as short-term insurance options to ensure family finances are not affected in the short term, while health insurance and whole life insurance can be chosen as long-term insurance to protect against future risks.
• Gradual adjustment: As family structure and financial situations change, regularly evaluate and adjust the insurance plan. For example, as children grow up and mortgages are paid off, it may be possible to gradually reduce the coverage amount or duration of certain insurances.

7. Consider the cost-effectiveness of insurance products#

When selecting insurance products, pay attention to their cost-effectiveness rather than simply pursuing high coverage or big brands. Compare different companies’ insurance products, choosing the one with the most suitable coverage content at the most reasonable price. Also, note that the terms and claims service of insurance products are important; try to choose companies with good service reputations and simple claims processes.

8. Regular evaluation and adjustment#

As time passes and life circumstances change, insurance needs will also change. For example, the birth of a child, aging parents, or career changes will all affect insurance needs. Regularly evaluate your insurance plan (such as annually or every two years) and make adjustments based on needs.

9. Avoid excessive reliance on a single insurance#

Try to avoid relying on a single insurance product to cover all risks. Different insurance products have different coverage focuses, so it is best to use them in combination. For example, critical illness insurance and health insurance complement each other, while whole life insurance and term life insurance play different roles.

10. Consider tax benefits#

Certain types of insurance may enjoy tax benefits. For example, in China, some enterprise annuities and health insurance can enjoy a certain amount of tax deduction before tax. Therefore, when configuring insurance, tax planning can also be combined to optimize the plan.

Example: Family Insurance Configuration Plan#

Assuming the family consists of: a couple and a 6-year-old child. The parents are 35 and 34 years old, with a combined annual income of 400,000 yuan.

1. Life Insurance:

   • Both spouses should purchase term life insurance, with a suggested coverage amount of 10 times the family’s annual income, i.e., 400,000 yuan × 10 = 4 million yuan. This way, in the event of an unfortunate incident, it can ensure the family’s basic living needs.
   • Whole life insurance: One spouse can consider purchasing a certain amount of whole life insurance as a wealth transfer tool.

2. Health Insurance:

   • Purchase commercial medical insurance for both spouses and the child, suggesting coverage for hospitalization, outpatient, emergency, etc.
   • Critical illness insurance: Purchase critical illness insurance for both spouses, with coverage amounts of 500,000 to 1 million yuan, covering most common critical illnesses.

3. Accident Insurance:

   • Both spouses can purchase comprehensive accident insurance with coverage amounts of 2 million to 5 million yuan.

4. Children's Insurance:

   • Purchase a child insurance policy that covers accidents, health, education, etc., ensuring that the child’s growth is protected against various risks.

5. Property Insurance:

   • Insure the family’s main property (such as the house and car) with appropriate property insurance to avoid losses from unexpected accidents.

A scientifically configured insurance plan not only ensures that daily life runs smoothly but also lays the foundation for future financial goals, such as children's education, home purchases, and retirement.

Now, how to ensure that the insurance you buy is the right one for you?

How to Quickly Understand an Insurance Contract?#

By now, we have covered a lot of insurance knowledge. It is important to note that over 80% of insurance agents have not received such systematic training. If you have absorbed the content thoroughly, you are already ahead of most unreliable insurance salespeople.

Now, let’s discuss a core practical issue: how to quickly understand an insurance contract. After all, what we are buying is that piece of paper, and the contract clearly defines our rights and obligations with the insurance company, which is crucial for our future protection.

Don’t be intimidated by the thick insurance contract; most of the clauses are common templates.

When reading an insurance contract, you don’t need to read it in its entirety. Focus on the numbers, including premiums, coverage amounts, insurance periods, payment methods, and payment duration, to determine whether the insurance meets your actual situation and expectations.

First, let’s talk about premiums and coverage amounts.

Many people often confuse them, but it’s simple: the premium is how much you pay, i.e., how much you are required to pay the insurance company periodically as agreed. The coverage amount is how much the insurance company promises to pay you at most when a risk occurs.

The insurance period indicates how long the coverage lasts—whether it is for 20 years, 30 years, or for a lifetime.

Additionally, pay attention to the payment methods; some are monthly, while others are annual. Many people often fail to pay on time, leading to insurance lapses, which is very unfortunate.

Besides important numbers, we need to pay attention to five critical time windows in the insurance contract: grace period, waiting period, contemplation period, grace period, and reinstatement period.

1. Grace Period:
   The grace period refers to the time between when we pay the premium and when the policy becomes effective. During this time, the insurance company does not assume responsibility. This means that even though the consumer has paid, they have not truly completed the "insurance" process. Generally, the grace period ends at 24:00 on the day the premium is paid, meaning the policy will officially take effect at that time.

2. Waiting Period:
   The waiting period refers to the period after the policy takes effect during which the insured is not covered for risks. Most health-related insurance, such as life insurance, critical illness insurance, and medical insurance, has waiting periods, generally ranging from 30 to 180 days. The main purpose of setting a waiting period is to prevent individuals from committing insurance fraud by purchasing insurance while already ill.

3. Contemplation Period:
   The contemplation period refers to the time after the insured receives the policy during which they can unconditionally cancel the insurance and receive a full refund of the premium. Currently, most insurance products have a contemplation period of 10 or 15 days. This can be likened to a 7-day no-reason return policy on e-commerce platforms. It is important to note that many insurance products with a term of one year or less do not have a contemplation period, such as one-year accident insurance, so it is crucial to consider carefully before purchasing.

4. Grace Period:
   The grace period refers to the period after the first premium payment, during which if the insured does not pay on time, the insurance company will grant a 60-day grace period during which the insurance contract remains valid. If the premium is paid within the grace period, the insurance contract continues to be effective. In other words, if the premium is not paid within 60 days after expiration, the insurance contract will automatically terminate. Note that "terminate" here means "suspend," not "end."

5. Reinstatement Period:
   The reinstatement period applies to situations where the premium is not paid on time, leading to the automatic termination of the insurance contract. In this case, the insurance company often allows the insured to apply to continue paying premiums within a certain period after the policy has expired. However, it is important to note that in addition to paying the overdue premium, the insured generally needs to undergo health underwriting and waiting periods again. The reinstatement period is generally two years; if not applied for within two years, the policy will terminate.

Understanding the meanings and durations of these five important time windows is crucial.

Finally, we need to pay special attention to three key clauses: insurance responsibilities, exclusions, and claims application.

These three clauses define what the insurance contract covers, what it does not cover, and how to apply for insurance money if an insurance accident occurs.

In summary, if we understand the numbers, timeframes, and clauses, we can quickly comprehend an insurance policy. By reading the clauses, we can maximize the avoidance of sales misguidance and clearly understand what we are buying and what is not covered, giving us a solid understanding of the protection we are paying for.

It is advisable for everyone to read through the clauses before purchasing insurance. Even if you do not have the patience to read everything, at least carefully read the key parts introduced above to maximize protection.

How to Fill Out the Beneficiary Section Safely?#

When buying insurance, people generally focus on the price, coverage content, exclusions, and the brand of the insurance company. These are all surface-level aspects that need to be carefully considered.

However, there is a small detail that often hides in the background and can lead to disastrous consequences if not arranged properly—this is the beneficiary.

First, let’s understand what a beneficiary is.
A beneficiary, also known as the insurance money recipient, is the person entitled to receive the insurance compensation. Generally, there are two types: living beneficiaries and deceased beneficiaries.

Living beneficiaries are those who can receive money while they are alive, such as in critical illness and medical insurance. This compensation is for the insured to use for treatment and cannot wait until they pass away (for example, if a father insures his son, the father is the policyholder, and the son is the insured).

The living beneficiary is generally the insured themselves.

Why is the living beneficiary defaulted to the insured?
For example, if Xiao Ming buys critical illness insurance for his wife, and his wife is diagnosed with cancer and needs the insurance compensation for treatment. If Xiao Ming can also be a living beneficiary and claim the insurance compensation, it could lead to a very negative impact if he holds the money and does not use it for his wife’s treatment.

As for deceased beneficiaries, they are the recipients of insurance claims that occur only after the insured passes away (such as life insurance and accident insurance). Only when the insured passes away can the beneficiary claim from the insurance company.

Therefore, deceased beneficiaries are generally not the insured themselves but rather the legally designated beneficiaries or specified beneficiaries.

Now, why is it necessary to specify beneficiaries?
It is very necessary! There are two reasons for this.

1. Convenience of Claims:
   If you choose a legal beneficiary, your relatives must provide detailed proof to the insurance company when applying for claims, such as "I am his mother, I am his wife, I am his son..." However, if you specify a beneficiary, the process becomes much simpler, requiring only some basic materials to complete the process, making claims more convenient.

2. Reduce Disputes:
   Many people think that legal beneficiaries are their closest relatives, but they forget that family structures and relationships can change over time, such as through divorce or remarriage.

In real life, there are many dramatic cases where a husband bought life insurance for himself before a divorce, and after the divorce, he passed away, leaving behind a 2 million yuan insurance claim. The wife believes she is entitled to at least half because she has been raising the children. Meanwhile, the husband’s parents believe she should not receive anything because they are no longer family. Both sides argue their points, leading to a legal battle.

However, if the beneficiary had been specified in advance, it would have avoided unnecessary disputes. For example, 50% to the parents, 50% to the child, with the child’s funds managed by the guardian until they reach adulthood, making the distribution clear.

Of course, some people say that specifying beneficiaries can isolate debts, while legal beneficiaries do not have this effect, which is pure nonsense.

Whether it is a specified beneficiary or a legal beneficiary, both are clearly designated. The only difference is that one is appointed by you, while the other is legally defaulted.

For example, if Xiao Ming owes 5 million yuan and passes away, leaving behind 2 million yuan in life insurance, regardless of whether the beneficiary is specified or legal, the claim will not be treated as part of Xiao Ming’s estate for debt repayment; it will go directly to the beneficiary.

However, note that only the claim amount can be exempt from debt repayment. If you want to buy a financial or savings-type insurance for debt isolation, be careful, as the court may force you to cancel the policy and use the cash value (the amount you can get back upon cancellation) to pay off debts.

Finally, let’s discuss how to specify beneficiaries.
It is very simple. If you are purchasing insurance offline, you can generally specify the beneficiary on the spot when purchasing; just fill in who you want. If you are purchasing insurance online, to protect the interests of most people, some products default the beneficiary to the legal beneficiary.

How to modify the beneficiary when purchasing online?
After the policy takes effect, you can contact the insurance company’s customer service to apply for a modification, submitting relevant materials or proofs as required. If you want to change it to someone else later, just contact the insurance company to make the change, which is very convenient.

In summary, the insurance claim amount is hard-earned, so it is essential to arrange it properly to avoid causing secondary tragedies.

Several Little-Known Tips for Saving Money on Insurance#

When purchasing insurance, many people only focus on the premium amount but often overlook some tips for saving money. In fact, by reasonably utilizing the policies, details, and market competitiveness of insurance companies, you can effectively reduce premium expenditures while ensuring comprehensive coverage. Here are some little-known tips for saving money on insurance:

1. Choose Long-Term Policies#

Some insurance companies offer long-term policies (such as 5 or 10 years), and these long-term policies usually have lower premiums than annual renewal policies. Especially in health insurance, life insurance, and other types of insurance, long-term policies can lock in premiums, protecting you from future premium increases.

2. Consider Increasing the Deductible#

Many health, auto, and property insurance policies have a "deductible" option. Choosing a higher deductible can significantly reduce your premium expenses. For example, in health insurance, raising the deductible usually means you will need to cover a portion of the medical expenses, but it can also lower your premium burden. If you are generally healthy or have a low incidence of loss, increasing the deductible is a good choice.

3. Utilize Group Insurance and Company Benefits#

If your company offers group insurance, consider joining, as group insurance typically has lower premiums than individual insurance. The group insurance policies negotiated by companies often have greater bargaining power and discounts, resulting in lower premiums and higher coverage.

4. Choose Appropriate Insurance Combinations#

Many insurance companies offer bundled insurance products, such as combining auto, health, and home insurance. This often results in discounts. Additionally, check if you can consolidate multiple types of insurance with the same company, which may also yield discounts.

5. Increase the Insurance Term to Reduce Premium Adjustments#

Some insurance policies adjust premiums upon renewal, but if you can choose a longer insurance term (for example, multiple years), the insurance company is less likely to adjust the premium annually, thus reducing potential future premium increases.

6. Streamline Coverage Based on Needs#

Carefully assess your needs and avoid purchasing unnecessary additional coverage. Sometimes, insurance companies offer additional clauses (such as accident insurance, hospitalization allowances, etc.) that may not be essential for some individuals. Reducing unnecessary coverage can significantly lower premiums.

7. Avoid Multiple Purchases of the Same Type of Insurance#

If you already have a certain type of insurance, such as critical illness or life insurance, do not purchase the same type again to avoid duplicate expenses. If you need to increase coverage, consider increasing the existing policy instead of buying a new one.

8. Purchase Through Online Channels#

Nowadays, many insurance companies sell insurance through online platforms, which are usually cheaper than traditional channels. Choosing to purchase insurance online not only saves on agent commissions but may also offer unique online discounts.

9. Check for Discount Eligibility#

Some insurance companies provide discounts for specific groups, such as drivers with no accident records, young healthy non-smokers, or those maintaining a healthy lifestyle. Understand if you qualify for these discounts and proactively inquire with the insurance company to potentially receive additional premium reductions.

10. Regularly Review and Update Insurance#

As time passes, your life situation and coverage needs may change. Regularly review your insurance policies to ensure they still meet your needs. If there are outdated insurance policies, consider canceling or adjusting them to avoid unnecessary expenses.

By employing these tips, you can effectively save on premiums while ensuring you have the right coverage. The key is to purchase insurance based on your actual needs, life circumstances, and long-term planning, rather than simply chasing the lowest price.

What are the thresholds for establishing an insurance company?#

(1) Financial Requirements
The state requires a minimum registered capital of 200 million yuan to establish an insurance company. This is not a small amount, and most insurance companies exceed this minimum standard. For example, a recent insurance company established has a registered capital of 4 billion yuan.

(2) Profitability
In addition to financial requirements, the company must demonstrate its ability to generate sustainable profits. This means that the main shareholders must have a good credit history and a net asset of no less than 200 million yuan.

(3) Regulatory Oversight
Insurance companies are subject to strict regulatory oversight by the China Banking and Insurance Regulatory Commission (CBIRC). They must comply with various regulations, including capital adequacy and solvency requirements.

(4) Reinsurance
Insurance companies often purchase reinsurance to mitigate risk. This means that they transfer some of their risk to other insurance companies, ensuring that they can cover large claims.

In summary, establishing an insurance company in China requires significant financial resources, a proven ability to generate profits, and compliance with strict regulatory requirements.