When it comes to insurance, many people resist it, thinking it's unnecessary to buy and that social security is enough. In this lesson, let's talk about the importance of insurance for the working class. First, let me tell you a little story.

In a forest, there lived a kind white dove. One day, while grooming by the water, the dove suddenly heard a cry for help. The dove immediately flew to the sound and saw an ant struggling in the water. The kind dove could not bear to see the ant in danger, so it picked up a piece of grass and extended it into the water to save the ant. As the ant was about to express its gratitude, the dove had already flown to the edge of the stream to continue grooming its feathers, as if nothing had happened. At this moment, a hunter came to the stream to drink water and saw the beautiful white dove. He was delighted and quietly drew his bow and arrow. The ant noticed this and thought, "Oh no, my benefactor is in danger. I must save him." So, risking its life, the ant bravely crawled onto the hunter's foot and bit him hard. The hunter, not knowing what had bitten him, looked back and dropped his bow and arrow. The white dove heard the noise, noticed the hunter, and immediately flew away.

Insurance is like that unremarkable little ant, which will come to your rescue without hesitation when you are in trouble. This is the meaning of insurance.

I. What is commercial insurance?

In professional terms, it is a contract signed voluntarily by both parties, where the policyholder pays the insurance premium to the insurance company according to the contract agreement. The insurance company assumes the responsibility to compensate for property losses caused by accidents that may occur according to the contract agreement, or to pay the insurance money when the insured person dies, becomes disabled, falls ill, or reaches the agreed age or term.

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Simplified, it is to pay for the risk of uncertain future life or property losses with a smaller expenditure at present.

II. Why buy commercial insurance?According to Article 72 of the Labor Law, "Employers and workers must participate in social insurance and pay social insurance premiums in accordance with the law." Social insurance mainly includes five types of insurance: pension, medical, unemployment, work injury, and maternity. From now on, our vast working class no longer has to be "naked" in the face of life's uncertainties.

Social security has lifted the vast working class out of the plight of being "naked." But upon reflection, how much protection does social security really provide? At best, it can be considered as putting on "big shorts," which still cannot keep warm in winter.

No one can guarantee good fortune for a lifetime, and no one can predict when risks will strike.

In real life, the richer people are, the more they love to buy insurance. For the wealthy, insurance is far more than just a simple guarantee for health expenses. More importantly, it can achieve wealth appreciation, asset preservation, debt isolation, and wealth inheritance, among other things.

Most of the working class's assets are invested in real estate, lacking liquid funds, and their ability to resist risks is almost zero. A single accident or a major illness can be enough to break a family. What reason do we have not to buy commercial insurance for ourselves and add a layer of protection for our own and our family's future? Therefore, we need to change our mindset, fully understand commercial insurance, and recognize that the expenditure on purchasing commercial insurance is worthwhile.

III. How to purchase commercial insurance

As of the end of 2020, there were a total of 235 registered regular insurance institutions under the China Banking and Insurance Regulatory Commission, including 14 insurance holding companies, 87 property insurance companies, 84 life insurance companies, 13 reinsurance companies, 7 health insurance companies, 27 asset management companies, and 3 insurance cooperatives. By logging into the official websites of these insurance companies, calling customer service, or contacting insurance intermediaries, you can choose and purchase products that suit your needs.In fact, there is no need to blindly trust large companies; essentially, any company with an insurance license is reliable. The China Banking and Insurance Regulatory Commission (CBIRC) enforces the strictest solvency standards for insurance companies. Even in the worst-case scenario, if the underwriting company goes bankrupt, it does not have the right to dissolve itself or declare bankruptcy without the approval of the CBIRC. Typically, another insurance company will be designated to take over all the policies of the original company. What if the designated insurance company refuses? The state also has an Insurance Guarantee Fund. According to the "Insurance Premium Regulations," insurance companies are required to pay a certain amount of funds annually, which are managed by the CBIRC. When an insurance company is revoked or declared bankrupt, it will provide relief to policyholders and assignees (new companies), underwriting the interests of the insurance company and your policy.

IV. Which commercial insurances are worth purchasing?

With so many insurance products on the market, which ones should I choose?

Insurance products are mainly divided into two major categories: one is property insurance, which takes the tangible or intangible interests of property as the subject of insurance; the other is personal insurance, which takes human life or health as the subject of insurance.

(1) Common types include home property insurance and motor vehicle insurance.

The coverage of home property insurance generally includes the house and its decoration, clothing, bedding, furniture, gas appliances, kitchen utensils, and household appliances; additional coverage includes theft, robbery, and insurance for gold and silver jewelry, cash, bonds, and third-party liability insurance, etc. Money is an external thing. For the working class, on the one hand, the value of furniture and home appliances is not high, and on the other hand, there is not much spare money. Currently, it is not urgent to insure home property insurance.Motor vehicle insurance refers to a type of commercial insurance that assumes compensation liability for personal injury or property loss caused by natural disasters or accidental incidents to motor vehicles. It is mainly divided into compulsory traffic accident liability insurance, third-party liability insurance, theft insurance, scratch insurance, glass breakage insurance, spontaneous combustion insurance, and deductible insurance, etc. It is recommended to purchase third-party liability insurance of 500,000 or more, and the type that does not deduct the deductible. If you accidentally hit a luxury car or injure someone, the compulsory insurance is far from enough to compensate, and there is a possibility of bankruptcy at any time.

(II) Personal insurance mainly includes critical illness insurance, medical insurance, accidental insurance, and life insurance.

(1) Critical illness insurance is a type of insurance product that provides coverage for specific major diseases such as malignant tumors, acute myocardial infarction, and sequelae of stroke. When the insured person suffers from the above diseases, the insurance company will pay a fixed amount of insurance to the insured person. Critical illness insurance is the most important insurance product for family and personal insurance.

(2) Medical insurance is a type of insurance protection that takes outpatient or inpatient medical treatment as the main content of protection. When the insured person incurs outpatient or inpatient medical expenses, the insurance company will reimburse according to the cost of the expenses. Medical insurance is generally used as a supplementary product to critical illness insurance to achieve comprehensive coverage of disease risks.

(3) Accident insurance is a type of personal insurance that pays insurance money based on the conditions of death or total disability caused by accidental injury. Accident insurance is mostly short-term, and long-term accident insurance is also more cost-effective. Accident insurance is also an important supplementary product for personal and family insurance.

(4) Life insurance is a type of personal insurance that takes the life of the insured person as the subject of insurance and pays the condition based on the survival or death of the insured person. Life insurance is divided into term life insurance and whole life insurance. Term life insurance mainly reflects the responsibility to the family and plays an important role in aspects such as mortgage, underage children, and supporting the elderly. In addition to the function of term life insurance, whole life insurance also has the function of wealth inheritance and is an indispensable product for family asset allocation.

Now, by reviewing a person's life, let's see which insurances we need.

(1) 0-25 years old stage

According to statistics, during the growth process of children and adolescents in our country, the probability of accidental injuries such as drowning, falling, or traffic accidents is the highest. In addition, during this period, children's resistance is relatively poor, and they are prone to diseases such as colds and fevers.During this period, it is advisable to purchase accident insurance, critical illness insurance, and million-dollar medical insurance for our children. The younger they are, the lower the cost.

(2) 25-30 years old stage

Having just entered society, with a certain income, not yet married, and not living with parents, you can feed yourself and the whole family is not hungry. The unit has purchased social security for you, providing a certain level of protection.

It is recommended to additionally purchase accident insurance and million-dollar medical insurance. If there is extra money, buy a life insurance policy (in case you are no longer there, who will take care of your parents) and a critical illness insurance policy.

(3) 30-65 years old stage

Having established a family, with a wife and children, as well as aging parents, the burden of life is on your shoulders. In case you, as the pillar of the family, have an accident, how can you protect the people you love?

During this period, it is recommended to standardize the purchase of critical illness insurance, life insurance, accident insurance, and million-dollar medical insurance, with the total cost controlled at about 10% of the family's income.

(4) After 65 years old

After a lifetime of hard work, you can finally retire and enjoy life. As people age, they are more prone to bumps and bruises, and their resistance is also poor, but insurance companies are no longer very willing to play with us.

At this stage, it is recommended to purchase accident insurance and million-dollar medical insurance. The cost of purchasing critical illness insurance is very high, and it is generally not considered for purchase unless there is a lot of spare money.A person's life is very long, we cannot wait idly for death, we must take the initiative to act and enhance the family's ability to resist risks.