Confused about insurance? Here are the basic types!

Insurance can be intimidating and navigating its different kinds, payment schemes, and technical features can be off-putting—especially if what we just want is a plan that will fit our needs and lifestyle.

To help you, we put together a guide on the basic types of insurance and their uses. Each type will answer a need and it’s up to you to decide which one you want to pursue and prioritize.

Life Insurance

This isn’t as morbid as some people think. Sure, it’s primarily meant to protect your loved ones after you’re gone, but would you not want to prepare for that?

Depending on the insurance company, plans will offer different clauses and terms. Life insurance, at its core, guarantees your beneficiary—most often a member of your family—a cash benefit should anything happens to you like terminal illness or death. It all depends on the insurance plan.

VUL insurance

Some insurance plans have added investment components that you can later use for retirement purposes. FWD Set for Life and All Set Higher, for instance, will cover you for 100 years and, at the same time, allow you to invest in different funds.

If you want to retire early with a comfortable nest egg, ask your financial advisor about the investment options that can be converted into a retirement plan.

Health Insurance

This type of insurance is meant to take care of your medical bills in case of sickness or hospitalization. It covers all forms of expenses incurred, depending on the plan you choose.

From general HMOs to more comprehensive plans, health insurance is a must in today’s world where medical bills can pile up really fast. Individuals without coverage can easily be overwhelmed and personal savings can be quickly depleted just to cover the cost of unexpected illness.

There are also plans that cover specialized sickness like cancer and critical illnesses. FWD Set for Health, for instance, will cover you against 57 major and minor critical illnesses and allow you to claim up to 3 times for unrelated major ones. FWD Fight Plan, on the other hand, covers you against all kinds of cancer, at all stages.

While there are various kinds of health insurance, it’s best to sign up for one that will cover your future needs, based on your age, gender, and other factors.  

Travel Insurance

If you are a modern-day nomad and love living your life on the road, you should always have some form of travel insurance. Not only does it cover you for unexpected illness while abroad (which can be incredibly scary!) but it also covers trip cancellations, and smaller things such as lost baggage. Insurance companies have evolved to cover us for almost any eventuality. Some companies, such as FWD Insurance will even cover for death or disability due to a terrorist attack.

Auto Insurance

If you have a car, get comprehensive insurance. While it is required by law to have, at least, the basic TPL car insurance, it would be wise to have comprehensive coverage. Comprehensive insurance payments may be an annual inconvenience but generally well worth every penny considering the hefty expenses associated with automobile accidents. Even minor damages can cost a pretty penny.

Home Insurance

Property owners know the value of having homeowner’s insurance. Having your residence covered gives you security against unforeseen events such as fire, theft, vandalism, or flooding.

Before you sit down with your financial advisors, know your reasons for getting insurance. This will dictate what kind of plan is best for you and your loved ones.