There are times in life when you need a significant amount of money.
However, if these expenses are predictable, they are nothing to fear.
What is truly frightening is suddenly losing the ability to earn money—that is, being unable to work.
This is where medical and life insurance come into play.
Medical insurance is used in cases of illness or injury. It generally covers situations involving hospitalization or surgery.
On the other hand, life insurance provides financial support to your surviving family members in the event of your death.
Today, there are various types of insurance available, but they can largely be divided into two categories: term insurance and whole life insurance.
Term insurance offers coverage for a specific period and is generally more affordable than whole life insurance.
In contrast, whole life insurance provides coverage for the insured’s entire lifetime. While it is more expensive than term insurance, a surrender value is refunded depending on the policy details and the timing of cancellation.
When considering life insurance, the following basic approach is recommended for married individuals with a spouse and children:
- Medical insurance should be a lifetime whole life plan.
- Life insurance should be a term plan that lasts until the children become independent.
Life insurance is meant to alleviate the burden on the surviving spouse of raising children alone in the event of your death.
Therefore, if you are single with no dependents, life insurance is generally unnecessary.
If you simply want to leave money for your funeral expenses, a policy worth about 1 million yen should suffice.
In contrast, medical insurance is essential for everyone.
As long as we are alive, there is always a risk of illness or injury, so enrolling in a whole life plan is highly recommended.
The funds we have available are naturally limited.
To make the most of your valuable resources, it is crucial to adopt the mindset of “keeping life insurance to a minimum.”