What do you consider justified insurances for income and property for a working-age, family person with debt?
In connection with the housing loan, I took out some kind of “critical illness cover” because they really wanted to sell it for 14e/month. But does that make any sense?
Accident insurance and compensation make sense to me, because a serious accident and physical injury can prevent working, but what about the others?
Are there experiences and opinions on what is worth taking and what is “not worth” taking? It’s also quite strange that some “lump sum compensation” is paid after treatments, but nothing before that?
Regarding insurance, it’s worth remembering that you are paying the insurance company for risk diversification. Thus, it only makes sense to pay for insurance for risks that you cannot carry yourself. For example, with home insurance, you should consider the size of the deductible. A smaller deductible covers smaller losses, but for instance, IF takes 20 cents for every euro paid out.
Those with families and debt should definitely consider scenarios where an adult’s (let alone a single parent’s) ability to work is lost due to illness or death. Wealth plays a significant role in this. A rental apartment and a million-euro stock portfolio require significantly lower income to maintain than a debt-free million-euro detached house.
I personally mostly have mandatory insurances because I rent and have no dependents. If death should come for me, I have enough financial assets for my parents to cover all costs. If I had a home, a spouse, and one or more children, I would certainly insure myself so they could continue living in their home and manage otherwise even if something happened to me.
As for serious illness coverage, its worth depends a lot on genetics. There are enough instances of cancer and infarcts in my family history that I’ll likely come out ahead, even though my own lifestyle is relatively healthy. If, on the other hand, the family were full of healthy elderly people, I would think twice.
Critical illness insurance is usually a relatively low lump-sum payout. Since Finland has survivors’ pensions, disability pensions, and other social safety nets, I wouldn’t insure those for much.
Generally speaking, insurance is not fundamentally worth it if you can afford to cover the costs yourself.
In our case, that’s not an issue. Yet, we also have—perhaps unnecessarily—premium comprehensive motor insurance, travel insurance, and home insurance.
I’m between 29-36 years old, so heart attacks etc. aren’t exactly expected anytime soon. In other words, is it worth “paying” for something like that right now? The salesperson was so pushy that I didn’t feel like listening, and I just took it on a whim, figuring I’d have time to look into it properly later.
I do have a family, debt, I’m a homeowner and all that, so if I were unable to earn an income, I’d definitely have to make some strategic moves.
The worst thing for me personally would be if I couldn’t work because of a serious accident. For that, is it better to have better life and accident insurance, rather than some “critical illness cover” that was categorized under things like stroke, heart attack, cancer, etc.?
Annoying salesperson; it felt like an obligation to take it since they negotiated such a good loan for me..
A sufficiently large life insurance policy with the rest of the family as beneficiaries. For the children, insurance was taken out before birth, so there are no restrictions. The house has the most comprehensive insurance available.
The more self-sufficient you are, the fewer insurance policies you need.
It’s worth considering how to secure your and your loved ones’ livelihood in the event of illness, disability, or death. In my opinion, the critical illness cover you described isn’t the most comprehensive option, but it is certainly affordable. Your personal risk tolerance also influences what you’re willing to pay for.
I just checked my own health insurance policy, which is significantly more expensive than that €14/month, but it ensures fast access to treatment in all situations.
A few rules of thumb provided by the insurance company:
if you have a family, take out joint life insurance with your spouse for the amount of your debt + €100k
for children, take out permanent disability cover for the amount needed for retraining and future loss of earnings
travel insurance with SOS service: handles all accident and illness situations abroad.
if you are an entrepreneur, take out disability insurance for an amount you can live on for the rest of your life – for both accident and illness.
serious illness: with a large deductible (>€2k), an amount that covers private care, e.g., cancer diagnostics, surgery, treatments, and rehabilitation (€100k).