What is The Value of Being Insured
1. Why do you need insurance?
Every day, the Press, radio, TV and people around you give the answer to this question: car, bike, aircraft accidents, work accidents, burglaries, fires, floods, earthquakes and other unpredictable disasters all over the world. All these are situations that can arise in life and cause important financial consequences. Why not protect yourself and your family against them?
Insurance is the most effective and smart solution to deal with the financial complications created by various risks in our lives.
Remember that it may take a whole life to create, but just one moment to lose.
2. What is insurance and how does it work?
To put it simply, insurance is a contract between an individual or an entity (the “client”) and an insurance company that enables—through a common fund, contributed by policyholders—the clients to deal with the serious financial consequences of potential risks that they alone would not be able to cope with.
Many types of insurance may seem complicated at first glance. However, the basic principles that apply are really simple. Firstly, the insurance company estimates the probability of a certain risk occurring and the extent of the losses it may incur. Then, based on statistics and field knowledge and experience, the company calculates the insurance premiums that the client needs to pay in order to insure “coverage” against certain types of accidents and consequent financial losses. When the insured accident occurs, the insurance company pays to the client the amount agreed in the insurance contract.
3. What are the benefits of insurance?
The benefits you can get from insurance are multiple:
Carefreeness, for you and your loved ones. You will not have to worry any more about the financial consequences of an unexpected disastrous event, such as an accident or illness.
Financial independence. An insurance programme will help you to make savings and maintain—when you retire, for example—a decent, if not the same, lifestyle in the years to come.
Fulfillment of your dreams. Through insurance you will be able to create the necessary funds for your own and your children’s education and their smooth integration in the labour market.
No more uncertainties and surprises in life; something that only an insurance programme can offer you.
4. What should I insure against?
Some insurance programmes are required by law: for example, it is mandatory to insure your vehicle or an employee. Non mandatory insurances though depend on your personal needs in life, such as the need to protect your income or to secure your children’s education. Another common case is that the terms of your bank loan require you to insure your mortgage property.
Naturally, needs vary a lot between different people. That is why there is no such a thing as a magic formula that will help you decide about your insurance policy. However, everything will be clear and easy if you prioritize your needs and important things in life, based significantly, of course, on your financial data.