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Insurance comes in all shapes and sizes in the market, from life and medical insurance that we see advertised all around us in Hong Kong, to the more complex investment-linked assurance scheme (ILAS) that combines insurance and investment.

However, the general principles in choosing and taking out insurance policies remain. You should first consider your need, and include aspects such as your role in the family in terms of providing financial support. If you have a job, your employer may have already provided you with basic medical and travel insurance. Make sure you fully assess your individual circumstances before making a decision.

Always read the policy carefully and pay special attention to any exclusions and conditions that may apply. Taking medical insurance as an example, pre-existing medical conditions are usually not covered by a new policy. It is important that you disclose fully and accurately the information as required by the insurer or broker. If you fail to do so, it may result in the termination of your policy.

There is a wide range of options so shop around and compare policies offered by different insurers. Even after you make a decision to take out a life insurance policy, you still have the benefits of a 21-day cooling-off period during which you can change your mind.