Why we need Insurance?
Life and uncertainty are very much synonymous. Most of us dream and plan things, to do and achieve in life but the truth is sometimes, you are just not ready for the unexpected. This unexpected can be anything from an accident, fire, theft, burglary and even death loss in extreme cases. These unfortunate events do have something in common, pain and financial loss.
The modern economic measures do provide an opportunity to safeguard you and your family against all potential risks. The opportunity we are talking about is known as Insurance. In simple terms, insurance protects you and your family from the financial losses due to any unfortunate circumstances. It reduces the financial risks in your lives.
More technically, insurance is a legal agreement between the insurer/ insurance company and the insured. According to agreement, the insured is bound to pay a fixed sum known as Insurance Premium to the insurer, who undertakes in exchange, to pay the insured or their dependants a certain fixed amount of compensation should an unexpected bad event occur. The contract is commonly known as Insurance Policy and is sold by insurance companies through their agents.
Insurance is a prudent financial tool that one must secure to manage the likely monetary risks. There are many reasons that leverage you to buy an Insurance Policy. First, it guarantees you peace of mind. It is always good to know that your hefty medical bills, cost of fixing your car or future finances of your family will be paid off. In America, it is a legal requirement to carry some auto and mortgage insurance coverage in many states. You are left with no alternative in such situations or face punitive action.
There is whole platter of insurance products according to the risks, for you to choose. However, not everyone needs every kind of cover. The insurance type you buy totally depends on your requirements and situation. Affordability is a big factor and people tend to focus on cheapest rather than the best and most suitable coverage for them.
Various types of insurance offered by companies broadly include cover for life, health, automobile, legal liability, long term care, dental, mortgage, accidental death and hazards. So the choice of insurance should be made wisely, as buying unnecessary insurance policies can lend that extra burden of monthly premium on you, thus no savings.
For an individual with a family to support, it is vital to carry some minimum amount of both, life and health insurance coverage. Auto insurance coverage is also legally required in Untied States. People not carrying any kind of cover are at disadvantage in an unexpected situation of loss. They have to bear the financial damage caused by the accident. Most insurance types have a certain maximum level of payout, but not all. The insurer makes compensations after evaluation of the loss filed by you in the claim. To reduce the premium, you can take group insurance facility or get all your home, health and life insurance policies from the same insurance companies.
Insurance is prudent for the financial security of you and your beneficiaries, may some unforeseen situation arise.