Whether the poor should buy insurance or the rich should buy insurance. The key to the problem lies in how you understand insurance and what insurance looks like in your eyes.
We must first return to the origin of the problem, what exactly is insurance? Insurance is essentially a risk management tool that helps you deal with future risks and gives you protection when you encounter risks.
Different insurances deal with different risks. Take the most familiar critical illness insurance as an example. Many people have said that the origin of critical illness insurance originated in South Africa. At that time, a doctor saw Many people cannot afford good treatment after getting sick, so he invented such an insurance. You can buy it when you are healthy, and get the insurance money for treatment when you get sick.
What is the biggest risk for each of us after getting sick? You have lost your income and have no source of income, and if you need a large amount of money to recover after getting sick, then critical illness insurance can smooth your financial risks, so that you will not drag down your family when you get sick.
Another very common type of life insurance is to give a sum of insurance money to the beneficiary when you die. So for the poor, if they buy life insurance, they can leave a legacy for their family members in the event of an accident and help them survive a difficult life. Another function of life insurance is that it is tax-free as an inheritance. For the rich, it can achieve the role of wealth inheritance by purchasing life insurance, especially large life insurance.
Therefore, both the poor and the rich are protected by insurance. This is also the core question for us to answer this question. Everyone needs insurance. Everyone needs insurance.
Insurance not only solves the problem of us ordinary people not having enough money to spend, but also solving the problem of rich people not having enough money to spend. It's just that different situations have different emphasis on insurance needs and different ways of applying insurance.
For us ordinary people who are poorer and don’t have enough money to spend, we can use the leverage principle of insurance to amplify the multiple of money as a tool to transfer risks. Because accidents always come unexpectedly and diseases always come uninvited, these will not go around you just because you have no money. If you encounter them, they may not necessarily kill you, but they will definitely cost you money. A person's health risk will be converted into a family's economic crisis. If an illness returns to before liberation, it is difficult for an ordinary family to resist. Therefore, for us ordinary people, using insurance to prepare for defense is a necessary preparation.
Rich people may not be short of money, but they are more stressed and have higher risks than ordinary people. Generally speaking, rich people do more business. Business risks, triangular debts, safety accidents, policy adjustments, breach of contract, litigation, etc. will quickly make a rich person go from financial freedom to difficulty, or even fall into economic crisis. You need to use insurance to avoid risks, separate family property and company assets, make arrangements for children and the elderly, and provide yourself with reserves that can calmly face crises and even make a comeback. It allows you to face crises calmly.
Poor people buy insurance to protect their lives; rich people buy insurance to protect their wealth.
Although both groups buy insurance, it is obvious that the insurance needs of the two groups are different! 1. The poor
Are the poor lazier than the rich? Are poor people less discerning than rich people? Are poor people worse than rich people?
Obviously, neither!
When a person becomes poor, his survival is the first priority; what is even more sad is that in order to gain this little ignorance of survival, it takes a lot of time and energy. Preventing them from obtaining additional wealth to help them turn over is the biggest problem facing the poor now!
Therefore, when a person does not have more wealth, his dreams and ideas are empty talk. Because there is no money, a disease may kill you.
Therefore, for the poor, insurance that can extend their lives is more important than anything else! Because the premiums for financial insurance and the like are really expensive.
Similarly, there are many insurances suitable for poor people. If you buy insurance according to your own financial situation, you can buy suitable insurance no matter what. 2. The rich
The rich do not lack medical expenses. For them, they are not afraid of using the money, but they are afraid of it being wasted. At the same time, rich people's industries are very large. Although the bigger the industry, the more profitable it is, but the bigger the business, the more loopholes there are.
A certain industry may become the straw that breaks the camel's back, causing a lot of trouble.
Therefore, for the rich, it is safe to hand over all or part of their wealth to their families and future generations. That's what they worry about most.
At the same time, there are many means and ways to realize these companies; but the rich are individuals after all. Who knows whether the policy will change in the future, and what if a certain way of inheriting wealth is cut off? Wouldn't other ways be better?
For the rich, insurance is one of the many ways to protect the safety of wealth, but not all!
If you have any questions about insurance, you can consult us
Whether to buy insurance is not judged based on whether you have money, but based on actual needs. Actual needs include inner needs and risk needs. If you want to buy insurance in your heart and your finances allow it, you can buy it and you will feel at ease. If the occupation you are engaged in has certain risks, you'd better buy it within the scope of your financial ability. Buy the insurance that’s right for you.
In a word,
Rich people buy insurance suitable for rich people,
Poor people buy insurance suitable for poor people.
The focus of the insurance bought by wealthy people is to protect the money earned from distribution and inheritance from business, legal disputes, and family disputes.
Money needs to be allocated in combination with investment and asset status, and insurance is one of the allocation methods, and it is a commonly used and relatively low-cost method.
But the poor are just the opposite. The poor (general income can basically be considered the same) basically only need to consider protection products, as long as they involve return insurance products, such as return critical illness, endowment insurance, annuity insurance, etc. , even insurance that calculates income is basically not recommended for ordinary families to consider.
For the poor, they do not have abundant cash flow and means of income, so they must not spend too much money on insurance products that they should not spend.
Generally, families are equipped with accident insurance, medical insurance and term life insurance. Other products should be considered based on their own financial strength. To be extreme, I recommend considering critical illness insurance later.
This may be controversial, but if I can only choose between medical insurance and critical illness insurance, I choose medical insurance. If I can only choose between term life insurance and critical illness insurance, I choose term life insurance. .
People who have no money should buy insurance, and rich people should buy insurance even more. They are in different social positions and don’t have many things to consider. There is a saying that the rich have more worries.
If you don’t have money to buy insurance, how can you afford to get sick?
Maybe you think that people are rich and have extra spare money to buy insurance. We poor people don't have any spare money to buy. It’s wrong to think this way. Risks never come to anyone, no matter whether you are rich or poor. In the face of risks, everyone is equal. Insurance is not the exclusive property of one person or a group of people, but a necessity for everyone.
So, how should people of different income groups configure insurance and enjoy the protection of insurance?
Characteristics of high-income groups
High-income groups are what we call high-net-worth individuals. Their income is much greater than the average level. Maybe funds are not the core issue they are worried about, so There seems to be no risk at all. But health and peace must be the focus of life. The reality is indeed that crises are everywhere. Diseases come at any time, and death appears at any time.
Once you encounter a risk, it will directly cause income interruption. It is okay to have no debt. If you have a huge bank loan, it will cause the family capital chain to be broken.
Required external insurance coverage - all high-net-worth individuals need to configure high-cost accident insurance;
Critical illness insurance - high-cost critical illness insurance to make up for loss of income;
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Medical insurance - high-end medical insurance that can reimburse for medications outside the scope of medical insurance, and even medical insurance that can provide medical treatment in other countries;
Financial insurance - an appropriate proportion of financial insurance can Ensure the inheritance of their wealth.
Characteristics of the middle-income group
Striving to be at the top, falling short of those above and having more than those below. Housing prices, medical care, schooling, and elderly care are all issues of concern, and they are burdened with tremendous pressure. Once there is a force majeure risk, such as an accident or serious illness, after more than ten years of hard work, we will return to before liberation. If you add in the unpaid mortgage and car loans, your life will become even more difficult and you will fall into a debt dilemma.
Required protection accident insurance - accident insurance that matches your worth;
Critical illness insurance - to avoid the lack of a later recovery expense after income is interrupted;
Hospitalization - share the loss of normal medical expenses;
Annuity pension insurance - if you still have extra funds, you can consider supplementing your pension.
Characteristics of low-income groups
The living environment is not good, they dare not get sick, they are afraid of getting sick, and even if they get sick, they will not be treated, and they may go bankrupt after treatment. Life is not easy at ordinary times. If something unexpected happens and you have to spend money, it will undoubtedly make things worse. Therefore, poverty is not a reason to refuse insurance.
The required protection includes accident insurance, critical illness insurance, fixed life insurance, and social medical insurance. We strive to optimize premiums and provide the most comprehensive protection.
No matter which group we are in, two things are absolutely fair, one is disease and the other is accident. No matter how much money we earn or how high our social status is, once accidents or illnesses occur, we cannot escape the clutches of risks, especially accidents. We can refuse insurance, but we certainly cannot refuse the emergence of risks.
Whether you have money or not, you should buy insurance. It’s just that rich people and poor people actually need different insurances! 1. What kind of insurance should the poor buy?
For the poor, the most important insurance to buy is protection insurance, such as critical illness insurance, medical insurance, life insurance, accident insurance, etc. Because the poor have very weak resistance to risk events such as accidents. If there is no risk transfer through insurance and other means, once a major risk event occurs, people will not be able to bear these risks alone, resulting in family living standards plummeting, and even the tragedy of selling houses and cars to raise funds for medical treatment.
But in real life, we often find a very common phenomenon. The poor often do not particularly care about their possible security risks, but prefer to use limited money to earn more money. .
There is nothing wrong with wanting to make money, but when these people buy insurance, they often give priority to purchasing so-called "financial management" insurance, while ignoring the configuration of protective insurance.
In fact, "financial management" insurance does not make us rich, it is just a relatively stable way of increasing asset value. Since it is a safe asset, its rate of return will certainly not be particularly high. Generally speaking, the long-term real rate of return of "financial management" insurance will not exceed 4.
Of course, the exception is investment-linked insurance, which will match investment-linked accounts with different risk levels according to the risk needs of the policy holder. For medium- and high-risk investment-linked accounts, the expected rate of return can reach a relatively high level, but policyholders also have to bear the risk of losses accordingly. This is somewhat similar to a fund, rather than simply a highly secure insurance product.
If the poor give priority to "financial management" insurance, the consequences are: Once larger risks occur, insurance cannot help them withstand these serious consequences; and "financial management" insurance cannot Help them realize their original dream of getting rich. Ideal and reality finally went on the wrong path! 2. What kind of insurance should rich people purchase?
For the rich, their accumulation of assets has enabled them to withstand any risks of disease and accidents. Therefore, they don’t really value protection-type insurance.
On the contrary, what they value more is insurance that can achieve the purpose of asset inheritance and fund distribution. For example, whole life insurance, extended whole life insurance, annuity insurance, etc.
Someone wants to say, didn’t I just say that the real rate of return of this type of "financial management" insurance will not exceed 4? Will the rich still like it?
Yes! Because the rich have relatively strong capital accumulation, they must allocate assets.
In fact, the ways for wealthy people to invest are very limited, and there are not many high-yield and high-security investment ways as we imagine. While the rich allocate part of their funds to make investments with higher risk levels, they also need to spend a large amount of funds as a safety cushion for their investments.
Insurance assets can not only ensure the safety of funds, but also make the rate of return exceed that of bank deposits. At the same time, they can also achieve a certain role in debt isolation and tax isolation. They are very popular assets for the rich.
Therefore, both rich and poor people actually need insurance, but the types of insurance they need are different. 3. What kind of people are called "poor" people?
Finally, I would like to emphasize that poverty is not what we usually understand. Only those who are penniless or have low income are called poor.
Even if the income is relatively ideal, people with high debts are actually poor; or people with high incomes but equally high expenses may also be economically poor.
Because their current stable living conditions are in danger of being disrupted by any risk at any time.
For example, Xiao Zhang earns 200,000 yuan a year, but has to pay off 160,000 yuan in mortgage and car loans every year. The income at his disposal is only 40,000 yuan, so he must live a tight life. , this is also poor.
In order to repay various loans, Xiao Zhang must ensure that he continues to work. This living condition seems stable, but once a risky event occurs, this balance will be broken. This fragile financial situation is a manifestation of "poverty".
Therefore, "poor" people in this sense actually need to give priority to protection insurance to transfer risks. They must not give priority to "financial management" insurance.
There is no need to struggle with such issues. It is important to understand the meaning and function of insurance and buy the right insurance that suits you!
Rich people buy insurance that suits their income, such as annuities, high-end medical care, etc.; those with low incomes buy high-leverage general medical insurance (such as Million Medical Insurance), etc. There is no one who should and who should not say .
Doctors extend the patient’s physical life, and insurance extends the patient’s economic life.
1) If the economy is average, you can configure accident insurance worth hundreds of dollars, medical insurance worth millions, term life insurance and critical illness insurance worth thousands of dollars to transfer the losses caused by risks;
2) If you are financially well-off, you can configure high-end medical insurance, high-amount accident insurance, critical illness insurance that does not group multiple payments to transfer risk losses, and you can also consider using annuity insurance, whole life insurance, etc. to protect your property and do a good job. inheritance.
Therefore, everyone has a reason to configure insurance. As for whether they will configure it or not, it depends on their personal understanding of insurance.
Both types of people need insurance, but because the risks are different, the insurance allocation ideas are also different.
What kind of insurance should people with no money buy?
For example, people who live on their own, or who live frugally and frugally, are in great need of insurance related to disease, accident, and death risks. Because once illness or accident occurs, income decreases and expenses increase, the balance of income and expenditure will immediately become imbalanced. Without savings, it will be really difficult to survive. If the family earner is at risk of death, the family income will be permanently reduced, and the life of the whole family will be even worse.
In addition, you need to consider your future retirement. If you are already retired now, you need to save unnecessary expenses and save a sum of money for the future so that you can enjoy "passive income" with peace of mind after retirement. Otherwise, you will not be able to retire on time. You must Work until you are 70 or 80 years old.
Therefore, they need to buy critical illness insurance, million-dollar medical insurance, term life insurance, and pension annuities to ensure that they will not have no money to eat or a place to live under various circumstances. What kind of insurance should rich people buy?
Assuming that a person is very rich, is not afraid of spending money to go to the hospital when he is sick, and has enough passive income (such as rent, deposits, equity, financial investment income, etc.) without working for the rest of his life, then there is no need to buy Insurance related to illness and accident (of course you can buy it if you want).
But they also carry risks. Generally wealthy people either run their own companies or are the second generation of rich people. If you run the company by yourself, then if you become seriously ill or die, the company's operations will inevitably be affected. Whether the company's good liabilities can be repaid as scheduled will cause panic. If this person does not segregate business assets from personal assets, then personal assets will be It is possible to pay off corporate debt, which is not a small amount of money. If the company's small shareholders covet control of the company, they may also need a sum of money to acquire scattered equity in order to resolve the crisis. After all, they are founders, and they all hope that their companies will last forever and be passed down to their favorite successors. If China levies inheritance tax when they die, then due to the high tax amount and high proportion, the loss will be huge and there will be much less left to the children.
If you are the second generation of rich people, then the risk is that you are financially dependent on your parents. Your parents’ risk is your own risk, and this is uncontrollable. If your parents suddenly get into disputes, or even break the law, declare bankruptcy, etc., and you have no source of income, can you adapt to the life of an ordinary working-class person? It is difficult for most people to accept this challenge. Therefore, they need to buy annuity insurance for themselves. Some parents will arrange a trust with nested insurance assets.
Therefore, they need to buy high-density whole life insurance and high-density annuity insurance, they can configure high-density critical illness insurance, and even set up family trusts to protect their businesses to the greatest extent and minimize the wealth they create in this life. Outflow, passed down from generation to generation to future generations.
In fact, people who have no money only have one worry, and that is "no money". And rich people have many more worries than people without money.