When it comes to insurance, it is vital not to lose sight of the primary purpose of enrollment, which is to secure insurance money in the event of an accident. Insurance is a financial product at its core, hence the importance of regular checks and updates. The value of money decreases over time, a factor known as inflation, which also affects the real value of insurance payouts.
Chae Man-sik, in his 1937 novel "Takryu," describes a protagonist who wishes to secure a life insurance policy that promises a payout of 1,000 won in the event of her death, a considerable sum at the time but virtually insignificant today. The narrative illustrates how the value of money and, consequently, insurance payouts diminish over time.
Often, one might come across content emphasizing the importance of keeping certain types of insurance, like thyroid cancer insurance policies from the past, which guaranteed 100% of the insurance money upon diagnosis. While maintaining these policies makes sense at first glance, it is important to consider the actual insurance amount, which can be quite low. In cases of high-cost treatment cancers, the insurance coverage from past policies might be insufficient.
To address this, it's necessary to periodically review your insurance policies to ascertain if the coverage is adequate. It's not about blindly cancelling old policies and signing up for new ones, but understanding that no insurance policy can be a lifelong companion. Thus, continual management and maintenance are crucial.
However, caution is required even when reviewing insurance policies and considering new enrollments. For instance, diagnostic money usually comes with a deductible period where no insurance money can be received, and a reduced period where only half the money can be claimed. Like funds and time deposits, which are checked periodically for returns and interest rate changes, insurance also requires similar attention.
The value of insurance money will inevitably drop as the cost of living increases. For instance, relying on a single insurance policy taken out in 2018 for a centennial maturity in 2118, without check-ups and supplements, would be unwise due to the long period. Therefore, the article highlights the importance of considering inflation when checking if insurance coverage is adequate, and being extremely careful when cancelling ongoing contracts. Regular check-ups and supplements are essential for insurance policies to protect us from risk effectively.