6 Reasons Why You Need Insurance
Getting insurance for your life, family, and property is beyond luxury. It is actually a necessity that would save you a whole lot in the long run. Insurance has to do with getting indemnity against a future occurrence, or some unknown event that may occur in the future. Taking security for uncertain events of life through insurance helps to mitigate risk, and is a smart way of providing protection.
With insurance, you pay a fee known as a premium to an insurance company, in order to transfer the cost of loss of what is insured to them, in a case of loss. Hence, when there is damage to the insured property, the cost of repair is transferred from the owner to the insurance company. In the case of a Life Assurance, the whole lump of premium is paid after the death of the insured, to his family.
Virtually anything can be insured, as there are different plans for whatever you want to insure; from your life to your pet. However, there are some important things to insure, such as yourself!
You are the most valuable to be insured; beyond your properties, because you are the one with the power to earn, in order to purchase those properties and use them. This is known as Life Assurance.
Other important things to insure are property, such as your house, vehicles, etc. This is important in order to cover the cost of repair or rebuilding in cases of fire, accident, damage, etc. Also, you can insure your future goals, such as school fees for your postgraduate studies, your child’s university fees, retirement plan, etc.
Below are seven reasons why you should make the smart decision of getting insurance today.
- Reduction of stress during hard times
Following the death of a person, who was responsible for the financial support of the family, insurance can help to reduce the level of stress and anxiety the family goes through, provided the deceased had insurance over his life. Life is uncertain and unpredictable, hence, unforeseen events such as terminal diseases, death, etc could upturn a family’s financial situation. However, in situations where insurance is in place, the stress would be greatly reduced.
2. Financial Security
Insurance is also a way to get financially secured and insured in situations of loss. In situations of death, or inability to continue working due to life events, insurance serves as a means of financial security to carry your financial burdens over time.
3. Transfer of cost of loss
Insurance also helps to transfer the cost of loss of a property from the insured to the insurance company. In other words, if you insure your house against fire, and it happens to burn down from natural causes, the cost of rebuilding the house would be solely on the insurance company, while you just relax. This is because you already insured the property before the incident occurred. This also applies in cases of other properties, such as cars, motorcycles, etc. See why you need insurance?
4. Peace of mind
Getting an insurance policy also guarantees peace of mind in a lot of ways. Life is uncertain and unfortunate incidents are mostly never planned for. However, in a situation where one is insured, one’s mind is at rest, since there is already a safety net in place, to help unforeseen bad situations. Knowing that even if you die, your family’s financial situation would not run to the ground is something to be grateful for. Also, in a situation where you can no longer work, you would rest assured that there would be no need to fret over financial responsibilities. This guaranteed peace is enough to get one to make the smart decision of getting insured.
5. Encourages savings
Insurance is also a means to save up over a long period of time, as stated in the policy you choose. Paying your premium consistently over a long period is a way of saving your funds and stashing money away.
6. Easy access to loan facilities
Insuring one’s property gives one ease of access to loan facilities, as the lender would be guaranteed of getting his or her money back, in a situation whereby the borrower is unable to pay and has to use his insured property as collateral. This is because even in a situation whereby the property gets destroyed, the insurance on it would cover the cost of loss, giving the moneylender something to fall back on, in the long run.