"Should I have insurance?" is a question that, asked of an agent, usually receives one answer: "yes." This article answers it the way a financial planner would: not everyone needs it, and not everyone doesn't. The answer depends on a single principle — risk management. Here is how to find your own answer, plainly.
The starting principle: risk can be handled four ways
Risk management says that when we meet a risk we have four routes: avoid (don't do the risky activity), reduce (look after your health, drive safely), retain (have enough money to pay yourself if it happens), and transfer (pay a premium for an insurer to take it). Insurance is the tool for the fourth route only. So "should I have it?" really means "should this risk be transferred or retained?"
The golden rule: transfer risks that are rare but ruinous
The risks worth transferring to an insurer have a clear shape: a low chance per year, but damage too large for your money to absorb if it happens — a serious illness costing millions, or the main earner dying while ten years of mortgage remain. Small frequent risks, such as an ordinary cold costing a few hundred baht in medicine, are cheaper to bear yourself than to pay someone else to manage. That is why buying insurance in order to claim on trivial things, to get value from the premium, is using the tool wrongly from the start.
Who clearly should have it
- Anyone with people depending on their income — children, a partner, or parents you send money to → life cover is a responsibility, not an option.
- Anyone with debt tied to them — a house, a business, or debt with a guarantor → a life sum insured at least equal to the debt.
- Anyone whose savings could not absorb a large medical bill — which is most of the country → health insurance is the armour around those savings.
- Anyone whose income is tied to their own body — freelancers, traders, the self-employed → health and disability cover matter especially.
Who may not need it yet, or needs it less
Honesty runs both ways. The groups for whom the case is weaker: people with liquid assets substantial enough to absorb the treatment costs or the obligations comfortably (genuinely able to self-insure); people with no dependants and no debt, who may not need a large life sum insured yet; and people whose existing benefits genuinely cover their needs at that point in time. One observation: this "not needed" status can change the moment life changes, and waiting until it is needed carries the cost in age and health that we mention often.
Check yourself in three questions
One: if a 1-million-baht medical bill arrived tomorrow, could your money pay it without shaking your life? Two: if your income disappeared permanently today, would anyone be in difficulty? Three: do your existing benefits cover the first two? Whichever you answer "no" to is the risk worth considering transferring. If you can answer "yes / nobody / fully" to all three, then the need today is low, and the money not spent on premiums should go into strengthening that position further.
In short
Insurance is not something everyone must have because someone said so. It is a risk transfer tool to be used when the damage genuinely exceeds what your pocket can take. Answer the three questions above honestly and the answer to "should I have it?" becomes yours, not the seller's. If you would like a neutral assessment with no predetermined answer, message us on LINE any time.
This article was inspired by material from the Thai Financial Planners Association (TFPA) and has been entirely rewritten.