Insurance plays a vital role towards ensuring that individuals, businesses and other property / assets are protected against any significant financial hardship or potential losses. Through monetary compensation, the insured willingly chooses to transfer their potential loss to another entity. By so doing, their financial future is guaranteed to continue seamlessly even when the worst happens.
So how does insurance work? At the beginning of every month or year, one is expected to pay a small amount of money (premium) to their insurer, like $100 to go to their health insurance. Hence, when you fall ill, instead of you taking money out of your own pocket, you’ll have your provider footing in all the medical bills. This helps take the burden off you since, making small but regular payments is a lot easier and affordable than paying a huge sum of money all at once.
TYPES OF INSURANCE:
In essence, there are different types of insurance all of which are geared towards protecting the insured’s future. The most common types of insurance include health, life, auto, home and commercial insurance.
In a nutshell, health insurance covers one’s medical expenses. This is due to the fact that medical bills are amongst the most expensive more so when dealing with a life-threatening disease. Unlike health insurance, life insurance is designed to benefit one’s dependents after they die. It’s hence paid out after one’s death. Auto insurance on the other hand targets drivers and car owners who want to protect themselves against accidents. For instance, after a road accident, the insurer pays for car repair, medical bills of the injured persons and in case of death, the funeral costs. In regards to home insurance, the home owners are protected against any damage against the home, such as burglary, fire or natural disasters. Lastly, commercial insurance is designed to ensure that the business continues to survive even when the worst happens; such as financial meltdown, robbery or lawsuits.
You will find that under these categories are other sub categories of insurance. For instance, under auto insurance, you’ll find comprehensive, liability, personal injury and collision policies. This is to ensure that one’s exact needs are met. It is usually best to have advisor from an auto insurance agency to help you understand the details of your policy and highlight any gaps in your coverage.
Insurance protects: May it be after a road accident, robbery, death or sickness, your insurer always comes in to make sure that you are never left on the cold. This helps a lot as it eradicates worry and stress.
Peace of mind: If you don’t have insurance, you’re bound to always worry about the ‘What Ifs’. The good news is, if you are insured, you’ll never have to think about your worst nightmare coming to haunt you.
Financial security: Since tomorrow will always be a mystery, insurance gives a guarantee that that mystery will never end up being a misery. As such, you can use the benefits to start afresh, pay off debts or leave an inheritance to your children and other dependents.
Insurance is therefore not something that you need to have but has to have. More importantly is that, the premiums, which are very affordable, won’t ever cripple your bank account but will instead make you really comfortable and gratified in the future.