To the readers of this blog, you may already know that insurance is a business of Risk Transfer or Risk Sharing (Takaful Concept).
The risks can be categorized into a few category:-
1. The age of the person (the older the person, the higher risk of claiming)
2. Smoking status (a smoker has higher chances of developing smoking related illness)
3. Occupation (a construction worker posses different risk as compared to an office worker)
4. Gender (based on mortality rate)
5. Health Status of the person (a loading or extra charges may apply, for example mild hypertension)
By agreeing to pay a 'price' known as 'premium' the insurer in turn shall provide the financial assistance (coverage) in times of unexpected events such as untimely Death, Dread Disease (Critical Illness), Accidents, Total Disability & Hospitalization.
The coverage given comes with a costs based on the attained risk (as mentioned above) and not known to many, the costs (Insurance Charges) will INCREASE as we get older.
The next time you are given the Sales Illustration, do try to read and understand the associated charges and not only based on the 'flowery' sales talk by the agents.