We have all been advised to buy insurance more than once – life, health, even buying a new car or starting a new business.
But, buying insurance is often avoided, thinking why do I need to buy health or health insurance when I am a young and healthy person? Or, why do I need my car insurance, I have good driving skills?
Contrary to such thinking, no matter how healthy we are or how well we manage financially or how talented we are, we all need insurance. This is because insurance serves as a safety net that protects you and your family financially when the chips are low.
In this blog, we will talk about everything about insurance, what it means, what types of insurance are most important, and why it is important.
What is insurance?
The concept of insurance is very simple to understand. A monthly or annual fee is paid by you, to the insurance company to insure your life, health, car, property, etc. for a period of time. In return, the insurer pays for the financial damage in the event of any injury to the insured person or object.
It therefore exceeds the risk of financial loss that you may incur as a result of health uncertainty in the insurance company for less money. For example, if you have a car accident and need to be hospitalized. Your health insurance will cover the medical expenses for hospitalization. Also, your car insurance will cover your car damage. In the meantime, if you die in an accident, your family will receive a lump sum amount of your long-term insurance.
From the arts to livestock, there is a wide range of insurance available, and one should get insurance according to their needs and priorities. But there are 3 types of insurance that are very important.
The 3 most important insurance policies are:
Life Insurance:
Life insurance protects your family financially in the event of your premature death. Here’s how it works. You pay a normal premium to an insurance company for a certain number of years. By repaying the insurance company you pay a guaranteed amount to your family if you die during the insurance period.
There are different types of life insurance and in some of them, you get a lump sum if you live during the insurance period. For example, time insurance offers a lower cover of a lower premium price compared to other life insurance policies. But there is no charge for the policy owner if he or she is still alive. Meanwhile, for policies like endowment or moneyback, the policy owner receives a lump sum after the policy expires. In such policies, premium prices are much higher compared to cover, compared to long-term insurance.
Health insurance:
Health Insurance is a way to ensure that you and your family can get the best health care without worrying about the cost.
In health insurance, the cost of medical insurance (s) is borne by the insurance company. To get the usual premium you pay, the insurance company pays all the costs associated with the disease the insured person needs to be treated for. These include hospitalization, day care, postage, and early hospitalization, etc. And with a cashless account, your debt is paid directly between the company and the hospital.
Liability Insurance:
Such insurance is available for property, car, business, etc. insurance. When buying credit insurance – such as car insurance, home insurance, business insurance, in the event of damage to an insured item or property during the administration of the insurance, the insurance company will do so. financially compensate the policyholder owner.
Now that you know the important type of insurance, let’s talk about why you need insurance.
Reasons for everyone to get insurance
As mentioned earlier, many people think that insurance is an unnecessary expense. The reason is that we feel confident about our future and our ability to cope with unseen situations. But there is a big difference between our ability to see and the reality. For example, a few years of savings can be lost in a medical emergency. This is just one example.
Here are 3 reasons why it is important to get insurance
# 1: Insurance guarantees family financial stability
No matter how much you have saved or how much your monthly income, an unforeseen event can burn a huge hole in your pocket or even endanger your family’s financial future.
For example, if you do not have adequate life insurance, your family may have to deal with financial hardship in the event of a sudden death. While there is no money to replace the loss of loved ones, having life insurance can save them from financial hardship. In the meantime, if you or your family do not have enough health insurance, then huge medical bills during any treatment can totally cost you money.
So it is important to protect yourself and your family with a fair amount of insurance.
# 2: Insurance brings peace of mind
The amount you pay to the insurance company is a guarantee that the insurance company will cover the damage in the event of an unforeseen event. Also, that assurance that your risk is included brings peace of mind.
For example, suppose you die suddenly when you still have a few important steps to take such as the children’s education, their marriage, your spouse’s retirement corporation, and so on. And there is a debt like a mortgage. Your premature death may put your family in a precarious position. However, if you were to buy long-term insurance considering all these factors, your family would be able to survive difficult times.
# 3: Insurance reduces stress during difficult times
No matter how hard you try to improve your health, an unforeseen occurrence can change your life completely, leaving you physically, emotionally, and financially depressed.