1. The Roles and Applications of Five Core Insurance Types
1.1 Critical Illness Insurance: Protecting Against Income Loss from Major Illnesses
Purpose:
Pays a lump sum upon diagnosis of specified critical illnesses (e.g., cancer, heart attack).
Covers treatment costs, rehabilitation expenses, and income loss due to illness.
Ideal For:
Primary breadwinners (whose illness could drastically reduce household income).
Individuals with family medical history or higher health risks.
Key Considerations:
Check disease definitions (ensure coverage for common mild/moderate conditions).
Recommended coverage: 3-5 times annual income (e.g., ¥600K–1M for ¥200K/year income).
1.2 Medical Insurance: Reimbursing Hospital/Outpatient Expenses
Purpose:
Supplements social insurance by covering non-reimbursable costs (e.g., imported drugs, VIP wards).
Common types:
High-deductible (millions coverage, low premium).
Mid-to-high-end (includes private hospitals).
Ideal For:
Everyone (especially those without social insurance or seeking better healthcare).
Best paired with critical illness insurance for full financial protection.
Key Considerations:
Note deductibles (e.g., ¥10K out-of-pocket before coverage starts).
Prioritize policies with 20-year guaranteed renewal.
1.3 Life Insurance: Safeguarding Family Financial Obligations
Purpose:
Pays beneficiaries upon the insured’s death/total disability.
Types:
Term life (e.g., 20/30 years, affordable).
Whole life (permanent, costlier).
Ideal For:
Primary earners (especially with mortgages/children’s education expenses).
Business owners (for estate planning).
Key Considerations:
Coverage should cover debts + 10 years of living expenses (e.g., ¥1M mortgage + ¥500K education = ¥1.5M minimum).
Term life is cost-effective for most families.
1.4 Accident Insurance: Covering Disability/Death from Injuries
Purpose:
Pays lump sums for accidental death/disability.
Often includes outpatient reimbursement (e.g., fractures, car accidents).
Ideal For:
Everyone (especially high-risk occupations like construction workers/drivers).
Frequent travelers (add-on aviation coverage recommended).
Key Considerations:
Verify if "sudden death" is covered (often excluded).
Avoid long-term accident plans (annual policies offer better value).
1.5 Annuity/Whole Life (Cash Value): Long-Term Savings & Retirement
Purpose:
Annuities: Provide regular payouts (e.g., from age 60) for retirement.
Cash-value life insurance: Grows tax-deferred funds for withdrawals/legacy.
Ideal For:
Steady earners seeking forced savings.
Retirement planning (to supplement pensions).
Estate isolation/transfer (avoiding inheritance disputes).
Key Considerations:
Hold long-term (early surrender may incur losses).
Compare IRR (internal rate of return); aim for ≥3%.
2. How to Match Insurance to Your Needs?
2.1 By Family Role
Single young adults: Prioritize medical + accident insurance; add critical illness if budget allows.
Families with children: Both parents need critical illness + medical + term life; children focus on medical + critical illness + education annuities.
Retirees: Supplement with cancer medical + retirement annuities to avoid burdening children.
2.2 By Health Status
Healthy individuals: Standard underwriting with broad options.
Pre-existing conditions (e.g., hypertension, nodules):
Try automated underwriting/multiple applications for lenient policies (e.g., cancer-only plans).
Assess if "exclusions" are acceptable (e.g., thyroid nodules not covered).
2.3 By Financial Goals
Conservative: Cash-value life/annuities for stable growth.
Aggressive: Use insurance only for protection; invest separately (e.g., stocks/funds).
3. Golden Rules for Insurance Planning
Protection before savings: Secure health/life coverage first, then consider annuities.
Parents before children: Adults are kids’ ultimate safety net.
Adequate coverage matters: Avoid "underinsurance."
Review periodically: Adjust every 3–5 years for life changes.
There’s no "best" policy—only the "right fit" for your situation. By clarifying needs and strategically combining coverage, insurance becomes a true safety net for your family.
