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How to Choose Insurance

E.SUN carefully plans for your risk protection needs from young to old age

What is insurance

Benefits of insurance

Provide Protection

If one suffers from illness or sustains accidental injury, it may cause financial impact on the family or the individual. At this time, the insurance payout can provide the function of risk sharing, so that life can be worry-free. In addition, as the aging society approaches, longevity has also become one of the risks that elderlies have to face. Through the planning of annuity insurance, endowment insurance, etc., the life of the elderlies can be more secure and abundant.

Tax Related Regulations

There are two main aspects in terms of tax related regulations for insurance, and they are insurance premium and insured amount:

1. Insurance premium:
According to current income tax laws and regulations, if the itemized deductions method is adopted in the income declaration, annual insurance premiums of less than NT$24,000 may be deducted per person. In addition, according to the current Estate and Gift Tax Act, insurance premiums of not more than NT$2,200,000 paid by parents for their children may be exempted from the gift tax per year.

2. Insurance benefit:
In terms of estate tax, according to Article 112 of the Insurance Act and Article 16 of the Estate and Gift Tax Act, Insurance benefit paid to the designated beneficiary at the time of death of the insured may not be considered the estate of the insured, and need not be included into the gross estate for estate tax payment purpose.

Accumulate Assets

Investment-linked insurance products combine the functions of insurance and investment. In addition to purchasing protection, part of the insurance premium paid for the insurance can be used to invest in investment tools such as funds, bonds, etc. stipulated by the investment policies.

Note: All tax regulations shall still be based on the latest tax regulations of the Republic of China, and the principle of substantive taxation and alternative minimum tax shall be considered based on actual circumstances.

Types of personal insurance

According to Article 13 of the Insurance Act of Taiwan: Insurance is categorized into property insurance and insurance of the person. There are four types of insurance of the person, which includes life insurance, health insurance, personal injury insurance, and annuity insurance.

Insurance of the person Types of Insurance Description
Life insurance Death insurance When the insured dies, the insurance company pays the Insurance benefit in accordance with the insurance contract. Depending on the term of policy, it is further categorized into two types, term insurance and whole life insurance.
Survival insurance An insurance where the insurance company pays the survival benefit in accordance with the insurance contract if the insured survives during the term of policy.
Endowment insurance If the insured dies during the term of policy, or still survives on the expiration date of the policy period, the insurance company pays the Insurance benefit in accordance with the amount stipulated in the contract.
Annuity insurance The insurance company pays a fixed amount of money in a lump sum or in installments to the insured during the life of the insured or during a specific period of time in accordance with the contract, mainly to protect the insured who lives longer and faces financial difficulty.
Accident Insurance Personal injury insurance If the insured sustains injury from an accident and becomes disabled or dies during the term of policy, the insurance company pays the Insurance benefit in accordance with the insurance contract.
Injury and disability insurance During the term of policy, if the insured is unable to work due to injury or suffers from illness after the waiting period, the insurance company pays the insured amount on a regular basis in accordance with the insurance contract.
Travel insurance Insurance benefit is paid when the insured sustains injury from an accident during travel and requires medical treatment, or becomes disabled or dies.
Health insurance Fixed benefit The insured submits a medical certificate to the insurance company to claim for hospitalization due to accident or illness, and the insurance company calculates the claim amount according to the number of days of hospitalization.
Reimbursement The insured submits a medical fee receipt to the insurance company to make a reimbursement claim for hospitalization expenses due to illness or accident. However, in order to prevent unnecessary waste, a maximum claimable amount is normally imposed.

Types of property insurance

Fire Insurance

Is a type of property insurance, and the insurance subject generally refers to the various types of movable and immovable properties. Movable property refers to furniture, clothing, books, office equipment, machine and equipment, etc. in the residence, while immovable property refers to building and fixed equipment attached to the building.
Movable property that is difficult to value, unable to value, or difficult to appraise, such as antiques, jewelry, documents, securities and land of immovable property, are not covered by general fire insurance.
Fire insurance mainly covers perils caused by fire. At present, the coverage can be extended to include perils such as typhoons, earthquakes, floods, explosion, theft, strike, riot, public harassment, malicious acts, penetration of automatic sprinklers, aircraft crashes, vehicle collision, etc.
In terms of types of loss, apart from the direct loss as a result of the above-mentioned perils, indirect loss coverage such as operations disruption, rental and lease value, additional expenses, leasehold interest, profits and commission, etc. can also be added.

Marine Insurance

There are five types of marine insurance which includes ship, cargo, shipping fee, liability and profit, and the insurance company is liable, with respect to the insurance subject, to indemnify for damage and loss arising out of all accidents and calamities at sea.

Land and Air Insurance /Aviation Insurance

Land and air insurance includes inland transportation insurance and aviation insurance. Inland transportation is an insurance where the insurer is liable, with respect to the cargo, to indemnify for loss arising during transportation on land and inland waterway. Aviation insurance insures various types of perils related to aviation, and its coverage mainly includes property loss and liability.

Liability Insurance

Liability insurance covers liability to third parties for damages caused by fault or negligence. Based on the different required amount, it is categorized into three types, compulsory liability, arbitrary liability and excess liability. Alcoholism liability, employer’s liability, passenger’s liability, etc. may also be added.

Other Property Insurance

Others such as car insurance, bonding insurance, theft insurance, cash insurance, etc. belong to this category.

Investment-type Insurance

“Investment-type insurance” has both protection and investment functions. The sum insured and policy value reserves of traditional life insurance are mostly fixed. In the event of inflation, it will reduce the real purchasing power of the policyholder and reduce the function of insurance protection or savings. The main features of investment-type insurance include the following:

Need to bear investment risk

The use of traditional insurance puts more emphasis on safety, while investment-type insurance pursues higher investment returns and the policyholders are to bear the investment risks. This is different from the guaranteed interest rate of normal traditional insurance.

Insured amount varies according to value of investment account

Investment-type insurance uses part of the cash value of the policy for investment, and then reflects the actual investment performance on the insurance benefit, and the insured amount will hence change accordingly.

Separate account

Asset management and usage method of investment-type insurance differ from that of traditional insurance. The investment profit and loss of investment-type insurance is borne by the policyholder. In order to protect the rights and interest of the policy holder, its assets have to be separated from the other assets of the insurance company to facilitate the use of investment principles determined by the policyholders. Hence, in terms of accounting, investment-type insurance needs to set up an assets segregation system according to the law, to distinguish investment-type insurance from the other assets of the insurance company.

Transparent fees

According to the law, when selling investment-type insurance, various fees such as insurance cost, upfront expense, policy maintenance fee, investment target conversion fee, etc., need to be disclosed to enable policyholders to fully understand the policy, and facilitate them in making their choices.

Insurance claim Trust

Origin of insurance claim trust

The development of Taiwan’s insurance claim trust business began after the 921 earthquake, following a number of cases in the central region where the insurance benefit left by the deceased parents for their minor children were claimed by the legal guardians instead of being used to take care of the children. These social issues led to the development of insurance claim trust business.

What is insurance claim trust?

Insurance claim trust is a financial product that combines “insurance” and “trust”, where the insurance benefit is the trust property, and the settlor signs an insurance contract where the settlor is the insurance beneficiary. In times of insurance payout or claim, the insurance company will hand over the insurance benefit to the trustee bank, where it will manage and use it according to the method stipulated in the trust deed. When the trust deed terminates or expires, the remaining assets will be handed to the trust beneficiary.

Purpose of insurance claim trust

The main purpose of insurance claim trust is to protect the financial security of the survivors (especially if the insurance beneficiary is a physically or mentally challenged person or minor child) after the death of the insured, preventing losing the meaning of insurance benefit due to improper management or misappropriation and embezzlement by others.

Operations of current insurance claim trust business

Customers who have the need for trust, may during or after the purchase of the policy, have the beneficiary (settlor) sign a “Trust Deed” with a trust institution (trustee), and notify the insurance company. When the insured peril occurs, the insurance claim trust contract will take effect automatically, and the insurance benefit will be handled over to the trust institution by the insurance company directly. The trust institution will manage and use it according to the instructions of the trust deed, and deliver the trust benefits to the trust beneficiary.

Warning for Trust

The trustee shall exercise due diligence with as a fiduciary duty of loyalty and duty of care of a good administrator in accordance with the purpose of the trust, and properly handle the trust affairs of the trust deed. The trust property is solely managed and used by the trustee. The settlor reserves the right to decide the use of the trust property, while the trustee does not have the right to decide the use of the trust property. The trustee shall not instruct the use of the trust property in violation of the law. Except as otherwise provided in the trust deed, the trustee shall manage and use the trust property in accordance with the purpose of the trust and the scope or method as agreed between the settlor and the trustee. The management and use of the trust property not risk-free. In addition to the trustee's due diligence with as a fiduciary duty of loyalty and duty of care of a good administrator, the trustee is not responsible for any gain or loss on the investment of the trust property. The past performance of the manager shall not guarantee the principal and minimum return on the trust investments. The settlor and beneficiary have understood that if the trust property of the trust deed is used for the subjects other than bank deposits, it is not covered by the Central Deposit Insurance Corporation.

Insurance for different group

Children and Baby

The first gift for your baby, start insuring as early as 15 days old.

Age 0 year old (15 days old) ~ 15 years old
Characteristics
  • No self-protection capability
  • No financial capability
  • No family pressure
Current needs Accident and health insurance, education fund
Long-term needs Higher education (example: college, graduate school or overseas studies) funds
Insurance planning recommendations The emphasis is health and accident protection during this period. Since the premiums of most types of insurance are cheaper the younger the age, if the parents’ financial situation permits, it’d be good if the child is protected by all kinds of insurance, which will save the most insurance premium. If there is financial concern, the children’s health and accident insurance may be added to their parents’ policies, saving a considerable amount of premium.
Other financial management recommendations Parents may start accumulating the children’s education fund in advance. It is a good option to invest mutual fund by dollar cost averaging., or you may choose an investment-linked insurance. Besides enjoying the benefits of investing mutual fund by dollar cost averaging, you can also enjoy the protection of life insurance or other riders.

Youth

Youths with their own opinions, make use of the comprehensive protection to share the loan of the parents.

Age 15~22 years old (schooling)
Characteristics
  • Without or has low financial capability
  • No family pressure
  • May be working and studying concurrently
Current needs Accident and health insurance, education fund
Long-term needs Higher education (graduate school or overseas studies) fund, business venture fund
Insurance planning recommendations The youth may have part-time jobs, and health and accident protection should be the emphasis at this time, as the premium for most protection insurances are cheaper the younger the insured. Hence, it is recommended to plan early.
Other financial management recommendations Customers may prepare the education or overseas studies funds or business venture fund through investment-linked insurance or investing mutual fund by dollar cost averaging. Customers who are concerned with asset preservation may consider life insurance.

People who just entered the workforce

People who have just entered the workforce would be able to put their best effort at work without worries if they have insurance protection.

Age 22~30 years old
Characteristics
  • Those who have just entered the workforce and have lower or unstable income
  • Medium to low financial capability (may be able to provide only part of household expenses)
  • Medium to low family pressure
Current needs Business venture fund, life insurance protection, health and accident protection, disability protection, family fund
Long-term needs Retirement and pension fund
Insurance planning recommendations This age group already has the ability to be independent but has limited financial capability. If there is financial concern, may consider term insurance. If the insured need to share part of the household expenses, they should increase life insurance protection to protect the livelihood of the parents and family.
Other financial management recommendations May make family planning in advance, and accumulating assets through investing mutual fund or planning insurance is a good option.

Singles

The singles make one envy, but while enjoying the carefree lifestyle, comprehensive insurance planning is the way to love yourself.

Age Above 30 years old
Characteristics
  • Single or do not plan to marry
  • Financially independent, less family pressure
Current needs Health insurance, accident insurance, family’s medical insurance
Long-term needs Business venture fund, retirement and pension fund
Insurance planning recommendations The singles have low financial pressure, and are independent. Hence, it is especially important to have a comprehensive protection plan. If you are able to make use of the return of premium, incremental insurance or investment-linked insurance to plan for retirement cash flow, and protection through medical and long-term care insurance, you’d be able to enjoy an exciting lifestyle without worries.
Other financial management recommendations As everything has to be handled by themselves, a financial reserve has to be set aside. Hence, high-risk investment is not recommended.

Newlyweds

From single to married life, the responsibility has increased, and it is necessary to re-examine and plan for the protection needs.

Age 25~35 years old
Characteristics
  • Family burden increases
  • Stronger financial capability
Current needs Family protection, loan protection, health protection, accident protection
Long-term needs Retirement and pension fund
Insurance planning recommendations As the responsibilities increase, the insured amount of the various types of protections such as health insurance, accident insurance, etc. shall be increased or additional policies shall be purchased, to protect the family. For example, the increase should be made when there is a newborn child. Insured amount of life insurance shall be more than or equivalent to 3 to 5 years of income + living expenses for family + various loans.
Other financial management recommendations During this period, the financial pressure is higher, but some funds should still be set aside for long-term planning, so as to prepare a fund for large expenditures such as buying a house.

Fulfilling middle age

The fulfilling middle age may make use of insurance to provide comprehensive protection for the family and children.

Age 35~55 years old
Characteristics
  • Family burden and financial pressure gradually decrease after reaching the peak
  • Near retirement age
Current needs Medical expenses, children’s wedding fund, family living expenses
Long-term needs Retirement and pension fund, estate and gift planning
Insurance planning recommendations With a happy and successful career, the middle age group may make use of insurance to provide comprehensive protection for the family and children. During this period, the children are becoming more mature and independent, and the pressure on the parents gradually decreases. At this time, besides reviewing the need to enhance their own protection to avoid increasing the children’s burden, they shall also prepare a retirement fund for retirement life as soon as possible.
Other financial management recommendations If there is a estate and gift plan, it should be prepared in advance, and plan using long-term tools such as insurance or trust as soon as possible.

The retired

Retirement is the beginning of the next chapter of life. While enjoying your old age and caring for your grandchildren, plan for your inheritance as soon as possible.

Age 50~85 years old
Characteristics
  • Low family pressure
  • Financial capability varies
  • High health protection needs
Current needs Retirement and pension fund, health protection, estate and gift planning
Long-term needs Make use of short-term, interest sensitive, and return of premium insurance to plan for retirement cash flow, and at the same time, pay attention to long-term care protection planning, for a beautiful life at old age.
Insurance planning recommendations To plan through insurance, the period should not be too long, and the policies should have a short payment period or maturity period.
Other financial management recommendations Should adopt a conservative approach for all types of investment and wealth management, and avoid high risk investments.

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Insurance products mentioned in E.SUN's web pages are provided by insurance companies, and E.SUN Bank only promotes and solicits purchases of these products. Each insurance company reserves the right to underwrite or reject insurance purchases.