Insurance is a protection from the risk of significant financial loss in the future.Insurance is a method of taking financial peace of mind against the risks and uncertainties in life like loss of property, untimely death, serious health issues. Insurance helps you and your family against different risks like car accident, a house fire, thief etc. If you are a life insurance policyholder you will get money if you get too ill to work or to provide for your family if you die.
Type of insurance:
There are different types of insurance policies in the insurance market. It is fact that any individuals or businesses find an insurance company for insuring them. The most conventional types of personal insurance policies are auto (car, motorcycle, bus, truck), health, homeowners and life insurance policies. In the United States, maximum people have at least one of these types of insurance.
There are special types of insurance policies for businesses, these types of insurance protect you from specific types of risks faced by a particular business. For an example, an insurance policy is a need in a fast food restaurant for covering damage or injury that happens as a result of cooking with a deep fryer.
Why is insurance important?
1. You and your family Protection
If you are an earning member of your family, Your family must depend on your financial support for a suitable standard life, for that reason insurance is specially significant for you and your family.
Because if the unexpected incident happens in your life, you may be protected from financial hardship through life insurance.
2. Decrease stress during very difficult times
We do not know what is our near destiny. Different unexpected occurrences such as injury, illness, permanent disability, even death can fall you and your family in an intense emotional stress and even misery. You or your family’s these types of financial stress may be reduced through insurance and can recover and rebuild your life.
3. To achieve financial security
It is not a matter that what is your present financial position. But anytime an unexpected event can change your life quickly and you can fall in a disaster. You can feel financial security in this adverse situation.
4. Peace of mind
Your health and wellbeing can be replaced by No amount of money- your role affects your family. But you will get at least peace of mind when you think that your family’s financial security is assisted by insurance if anything happened to you,
5. To get a legacy
Your children may secure the financial future for your children and protect their standard of living through a lump sum death benefit.
6. To compensate you for an accident caused by someone else
If you get into an accident that’s caused by someone else you can get stress free for car insurance. In that situation of the accident, you’re the victim and you need compensation for injuries and as well as any damage to your vehicle. If you have no other financial resources, Car insurance enables you to compensate you for your loss.
7. You can compensate someone else for an accident you caused
You may involve in an accident that’s clearly your fault.If you didn’t have car insurance, you can be a victim on the other side of a lawsuit and for that reason, You can spend a lot of money and you feel uncertainty over your future. If you have vehicle insurance, you can get financial assistance, even if the accident is your fault.
8. To protect your assets
Your assets like your vehicle; your home is the most valuable to you. These may be destroyed by accident or fire. Insurance can protect your property by providing compensation.
9. To protect your home
Home insurance policy covers fire and different natural calamities including flood and storm. But you have to pay extra to cover earthquake. A comprehensive home package policy protects your house from damage, burglary, and electrical or mechanical breakdown.
10. Life insurance encourages savings
Insurance does not protect only against risks and uncertainties, but also makes a opportunity an investment channel too. A systematic saving is made in life insurance due to payment of regular premium. It helps to make a habit of saving money by paying premium. The insurance holder will get the lump sum amount at the maturity of the contract. So it can be declared confidently that life insurance encourages savings.
People need insurance for various reason. But insurance is required by law in some cases. In some countries, insurance is mandatory for all. It is fact that people need different insurance policies in different stages of life. So you should review your policies at least once a year to make sure you have the best policy to fit your lifestyle.