8 tips for buying life insurance for your family
Life insurance is a long-term financial decision, so making the right choice from the beginning can help families stay protected while proactively balancing their budget.
Based on practical experience, Cathay Financial Group offers important notes when participating in life insurance, including: choosing reputable companies and agents, thoroughly understanding the contract, joining early, balancing premiums with protection duration, and providing honest information. These suggestions help newcomers reduce risks and optimize the value of their policy.
Life insurance tips for your family from A to Z
1. Identify your needs clearly before choosing a plan
Before selecting a product, families should clearly define their objectives for purchasing life insurance.
Buyers can start with questions such as: Is the insurance meant to protect against risks, or does it also aim toward long-term savings goals? Who needs to be covered? Is the family prioritizing health benefits, death coverage, critical illness protection, or financial preparation for a child's education?
Once these needs are clearly defined, buyers can more easily select a product, level of coverage, and additional benefits that are appropriate for their circumstances. Conversely, adding unnecessary benefits may increase costs without delivering value that corresponds to the family's actual needs.
2. Choose a reputable insurance company
Life insurance is typically tied to long-term financial planning, so the reputation and financial strength of the insurer are factors worth examining before signing a contract. Buyers can assess these through the company's operating history, financial position, business performance, and ability to sustain operations over time.
The quality of the advisory team is also worth considering. A knowledgeable consultant who clearly explains policy benefits and conditions helps buyers develop an accurate understanding of the product before making a decision.
As a prime example, in the Taiwan market, Cathay Life has built a solid foundation and deep engagement with consumers over many years, currently serving more than 8 million customers and managing over 20 million in-force insurance policies.
In Vietnam, Cathay Life Vietnam is serving more than 500,000 customers, with a network of 120 business locations nationwide, a team of around 2,400 consultants, and more than 260,000 in-force insurance policies.
3. Understand the terms and benefits before signing
This is a step buyers should not overlook. Before signing a policy, they should carefully review the coverage benefits, premiums, policy term, additional benefits, and exclusions. If any provision is unclear, buyers should ask for a specific explanation.
In particular, buyers should distinguish between the benefits provided by the main policy and those offered through supplementary benefits. Each additional benefit may affect the premium, coverage period, or benefit payment conditions. Understanding each provision helps families avoid selecting unnecessary benefits or developing inaccurate expectations about the scope of coverage.
After receiving the policy, buyers should also review all key information and make use of the 21-day review period if the policy is subject to this provision [1]. This period allows buyers to reconsider the policy terms and decide whether to continue with the coverage. If any information is inaccurate or unsuitable, buyers should proactively discuss the issue and proceed in accordance with the policy terms.
4. Choose a premium level that fits your financial capacity
Life insurance premiums should remain within a family's long-term ability to pay. More importantly, buyers should ensure that premiums do not place pressure on essential household expenses and can be maintained consistently over the long term.
Choosing premiums that are too high relative to income can make it difficult for policyholders to continue making payments in the future. If the policy is not maintained in accordance with its terms, insurance benefits may be affected.
For people with unstable income, it may be worth considering products that allow flexibility in premium payments. This can give policyholders greater control when their income changes, rather than requiring them to bear the pressure of a fixed premium over an extended period.
However, the degree of flexibility and applicable conditions vary by product, so buyers should carefully review the policy terms before making a decision.
5. Enroll early - the younger you are, the lower the premium
Age and health status are factors used to determine life insurance premiums. According to the reference sources, younger applicants who are in good health generally pay lower premiums and may have the opportunity to secure coverage for a longer period [2].
For example, if two people select the same level of benefits but differ in age, a 25-year-old may pay a lower premium than a 40-year-old.
However, a specific difference in premiums should not be stated without an illustration for the same insurance product, as premiums also depend on various other factors, including the product, occupation, gender, health status, and sum insured.
6. Declare health information honestly
Providing complete and accurate health information is an important responsibility for anyone purchasing life insurance. This information is used during the underwriting process and may directly affect whether the insurer approves the coverage, the premium charged, and the settlement of benefits when an insured event occurs [3].
If an applicant intentionally provides inaccurate information or omits relevant details, their insurance benefits may be denied when an insured event occurs, depending on the policy terms and applicable laws.
This is not merely a matter of honesty when entering into an insurance contract; it is also a way for buyers to protect their own rights and benefits in the future.
7. Work with your agent to choose the right solution
Your insurance agent is a trusted partner who helps you understand the product and supports you throughout the process of getting covered. To ensure the policy truly fits your needs and financial plans, it is a good idea to stay actively involved and discuss your rights, obligations, and the applicable terms with your agent. Reading the contract carefully remains an important step, giving you peace of mind about your decision.
You can ask your agent to clarify anything you are unsure about, especially the scope of coverage, exclusions, premiums, the policy term, and any conditions that affect your benefits, then compare them against the official documents before signing. This active collaboration helps you arrive at a protection solution that best matches your needs.
With the strong focus on training a professional workforce, Cathay Financial Group delivers transparency and a trustworthy advisory experience to its customers. As proof of the quality of this training, Cathay Life currently has more than 1,500 MDRT-qualified members and nearly 900 members honored with the International Dragon Award (IDA), one of the most prestigious and respected awards in the global finance and life insurance industry.
8. Common mistakes to avoid when buying life insurance
Life insurance is a specialized field, buyers need to proactively educate themselves while also finding a trustworthy agent to advise them based on their specific situation. Here are the most common mistakes to avoid:
Buying based on emotion or relying solely on recommendations: Failing to thoroughly review the product and policy terms can lead to incorrect expectations about the benefits payable.
Choosing premiums beyond your financial capacity: Excessive premiums can make it difficult to maintain the policy, potentially affecting insurance benefits.
Failing to read the exclusions carefully: Buyers may assume a particular risk is covered when, in fact, the event falls under an exclusion specified in the policy.
Surrendering the policy too early: Terminating a policy in its early years may result in a surrender value that is significantly lower than the total premiums paid, depending on the product and policy terms.
Failing to update information as circumstances change: Policyholders should proactively review their contracts whenever protection needs, financial capacity, or personal information change to ensure the insurance plan remains suitable.
Frequently asked questions
Should I buy life insurance for my family?
If a family has a primary income earner or is pursuing long-term financial goals, life insurance may be worth considering. Its primary value lies in providing financial support if the insured faces a life or health-related risk, thereby reducing the financial burden on other family members.
In addition to protection, some products may combine protection with savings benefits, which can support long-term goals such as preparing funds for a child's education or other future plans. Health-related benefits may also help ease the financial pressure arising from unexpected medical expenses.
However, life insurance is only suitable when the premium is within the family's financial capacity and the policy can be maintained over the long term. Therefore, before purchasing coverage, buyers should clearly assess their needs and financial situation rather than making a decision based on social pressure or recommendations alone.
Should I buy life insurance or put money in a bank savings account?
Life insurance and bank savings can both play a role in a family's financial plan, but they serve different purposes. Life insurance focuses on protection against life and health-related risks, subject to the scope and terms of the policy. By contrast, savings deposits are primarily intended to accumulate and manage surplus funds and do not provide the same type of protection.
Therefore, the two should not necessarily be viewed as mutually exclusive options. A family can use savings to build an emergency fund while allocating part of its budget to life insurance to strengthen financial protection against major risks. The appropriate balance depends on the family's income, financial goals, and protection needs.
Cathay Life Vietnam – a considerable choice for families
Cathay Financial Group is one of the leading financial groups in Taiwan. Possessing an outstanding comprehensive financial ecosystem, the group has established its presence in the Vietnamese market through three member companies: Cathay Life Vietnam (Life Insurance), Cathay Insurance Vietnam (Non-Life Insurance), and Cathay United Bank – Ho Chi Minh City Branch (Banking). This synergy creates a solid financial foundation, delivering an optimal suite of protection and asset management solutions for both individuals and businesses.
Backed by its strong parent brand and guided by a "people-centric" philosophy, Cathay Life Vietnam quickly established its position as the first Asian life insurance company licensed by the Ministry of Finance to operate in Vietnam. The company leverages over 60 years of international management experience to develop specialized protection solutions tailored to each stage of a Vietnamese family's growth.
For families seeking a long-term protection plan, Cathay Life Vietnam offers a wide range of insurance product portfolios designed to meet various financial goals and protection needs. It stands out as a worthy choice for policyholders who prioritize a long-standing operational foundation, professional service, and protection solutions tailored to every family stage.
Conclusion
Buying life insurance for a family is a long-term financial decision that should not be based solely on premiums or recommendations from an insurance advisor.
Clearly identifying needs, choosing an appropriate insurer, understanding the policy terms, and maintaining premiums within the family's financial capacity can help ensure that the protection plan delivers value when it is needed.
More importantly, buyers should take the initiative to build their knowledge and regularly review their policies to ensure that their coverage remains aligned with the family's needs at each stage of life.
References
[1] Khach hang co 21 ngay de tu choi tham gia bao hiem sau khi da mua. (2022). Thuvienphapluat.Vn. https://thuvienphapluat.vn/chinh-sach-phap-luat-moi/vn/ho-tro-phap-luat/chinh-sach-moi/44905/khach-hang-co-21-ngay-de-tu-choi-tham-gia-bao-hiem-sau-khi-da-mua
[2] Thong tin dich vu. (2024). Top 3 ly do nguoi tre nen tham gia bao hiem nhan tho som. Bao Thanh Nien. https://thanhnien.vn/top-3-ly-do-nguoi-tre-nen-tham-gia-bao-hiem-nhan-tho-som-18524032717101071.htm
[3] VnExpress. (2021). Co can khai bao tinh trang suc khoe khi tham gia bao hiem? Vnexpress.Net; Bao VnExpress. https://vnexpress.net/co-can-khai-bao-tinh-trang-suc-khoe-khi-tham-gia-bao-hiem-4404483.html
[4] Cathay Life. (2026). Cathay Life. https://www.cathaylife.com.vn/cathay/about