What to know about insurance

We all want financial security for ourselves and for our family. We know that having insurance can help us put together a solid financial plan. Yet many of us don't really think about insurance.

Most often, we don't think about the risks and unforeseen events we face on a daily basis. It may also be because we don't know much about insurance. Nowadays, there are insurance policies for everyone. Even if you have children with disabilities, there is a insurance policy for these disabled children.

Contrary to such ideas, no matter our health, our financial situation or our quality as a driver, we all need insurance. This is simply because insurance acts as a safety net that protects you and your family financially when the chips are down.

In this article we will talk about everything about insurance. We present the different types of insurance and their importance on our lives. But first, here is my ebook which allows you to better understand the management of your personal finances.

✔️ What is insurance?

The concept of insurance is very simple to understand. You pay a monthly or annual fee to the insurance company for ensure your life, your health, your vehicle, your property, etc. for a certain period. In return, the insurer covers financial damages in the event of damage caused to the person or object insured.

You therefore transfer the risk of financial loss that you may incur due to life's uncertainties to an insurance company for a small fee. For example, if you have a car accident and need to be hospitalized.

Your health insurance will cover the medical costs of hospitalization. And, your auto insurance will pay for damage to your car. In the meantime, if you die in the accident, your family will receive a lump sum for your term insurance.

From arts to pets, there is insurance available for a number of things, and one should avail of insurance according to their needs and priorities.

✔️ Importance of insurance

As we said at the beginning, most people think of insurance as a unnecessary expense. The reason is that we are confident about our future and our ability to cope with unprecedented circumstances.

But there is a huge difference between our perceived ability and reality. For example, a few years of savings can disappear in the event of a medical emergency. This is just one example. Here are 3 reasons why getting insurance is important

#1: Insurance provides financial stability for the family

No matter how much you've managed to save or what your monthly income is, an unforeseen event can burn a huge hole in your pocket or just put your family's financial future in jeopardy.

For example, if you don't have adequate life insurance, your family could face financial hardship if you were to face an untimely death. Although no amount of money can replace the loss of loved ones, life insurance would save them from financial hardship.

Meanwhile, if you or your family don't have enough health insurance, huge medical bills during any treatment can completely shake your finances. It is therefore essential that you ensure that you and your family have an adequate amount of insurance.

#2: Insurance brings peace of mind

The premium you pay to the insurance company is the price that guarantees that the insurance company will cover the damage in the event of an unforeseen event. And, this guarantee that your risk is covered provides peace of mind.

For example, suppose you die an untimely death at a time when you still have several steps to go through such as the education of the children, their marriage, a pension corpus for your spouse etc. There is also a debt like a mortgage.

Your untimely death can put your family in a melee situation. But, if you had purchased term insurance considering all these factors, your family would be able to get through the tough times.

#3: Insurance reduces stress in difficult times

No matter how hard you try to improve your life, an unexpected event can completely shake things up, leaving you physically, emotionally, and financially strained.

Having adequate insurance helps in the sense that at least you don't have to think about money during such a difficult time and can focus on recovery.

For example, Suppose you or a family member has had a heart attack and needs immediate hospitalization. Such treatments in good hospitals can cost laks.

So having health insurance in this case saves you the worry and stress of arranging money. With insurance in place, any financial stress will be taken care of and you can focus on your recovery.

✔️ The different types of insurance

Three insurance are the best known.

#1. life insurance

Life insurance protects your family financially in the event of premature death. Here's how it works. You pay a regular premium to the insurance company for a number of years. In return, the insurance company pays an insured sum to your family if you die during the term of the contract.

The insured appoints one or more persons (beneficiary/beneficiaries) who will receive the death benefit as indicated in the policy. The death proceeds or benefit are tax-free.

There are two types of life insurance:

• Temporary

It provides coverage for a specific duration. If the insured dies during the coverage period (and the premiums are paid), the beneficiary receives the death benefit as stated in the policy.

Coverage ends at the specified duration. It can be renewed after the term, however, the premium may increase since the premiums may depend on the age of the insured.

• Permanent

It covers the insured throughout his life (unless the insured does not pay the premiums). There are two kinds:

Whole life insurance – this ensures that your premiums will not change as you age. This type of insurance has a guaranteed minimum cash value and a guaranteed death benefit amount.

Universal life insurance – it is a product combining life insurance and investment.

#2. Health insurance

Health insurance can help pay for health care costs. Some types can supplement your income if you suffer a serious illness or injury. Other types may pay medical bills if you fall ill while on vacation.

Here are some types of health insurance:

• Complementary health insurance
• Disability insurance
• Travel medical insurance
• Critical Illness or Trauma Insurance
• Long term care insurance

#3. General Insurance

Property insurance covers loss or damage to your home or personal property, car or business. Property and casualty insurance protects the insured from legal liability for losses caused by injury to other people or damage to property of others.

Here are some types of general insurance:

• Home or property insurance
• Tenant or tenant insurance
• car insurance
• Liability insurance
• Accident Benefits/Personal Injury Insurance
• Collision insurance
• Back to back insurance
• Business Insurance
• Commercial property insurance
• Liability insurance
• Errors and omissions insurance

✔️ Key Concepts in Insurance

Police – a legal contract between you and the insurer. It details what risks are covered, under what circumstances the insurer will pay you, how much money and what type of benefit you will receive if you make a claim.

Policyholder – the insured or the person covered by the policy.

COVER – the amount of coverage you have purchased. This is also the maximum amount the insurance company will pay you if you make a claim for a loss or event covered by your policy.

Our Service – the amount that the insurer will pay you if the insurer accepts your claim.

Premium – the amount you pay for the insurance.

Surrender value – this is the amount the insurer pays the policyholder when a life insurance policy is cancelled. It can also be an amount added to the death benefit and can be paid on the death of the insured. This term is used with permanent life insurance policies.

Death benefit – the amount that the insurer will pay to the beneficiary(ies) on the death of the insured.

Claim – this is the official notice to your insurer to be paid for a loss or event covered by your insurance policy.

Beneficiary – this is the person or entity that the insured appoints or designates to receive the proceeds of the policy. A beneficiary can be revocable (can be changed at any time without notifying the beneficiary) or irrevocable (cannot be changed without the beneficiary's written permission).

Franchise – the amount you agree to pay before the insurer pays the rest.

Exclusions – things that are not covered by your policy. For example, some health insurance policies may exclude certain medical conditions you had before applying for insurance, or a travel insurance policy may exclude claims if you are traveling to a high-risk country.

This is why it is important to read your policy carefully to check what it covers and what it does not cover so that there are no surprises when making a claim.

Risque – probability or probability that an insured event, such as loss, injury or death, will occur while the policy is in force.

rider – this is a clause or term added to your insurance policy to provide protection. This has an additional cost because it covers risks not covered by the basic policy.

Spas – the period during which you are covered by your policy.

✔️ FAQ

Q: What is insurance?

A: Insurance is a contract between an individual or business and an insurance company. In exchange for paying a premium, the insurance company agrees to provide compensation in the event of a claim or financial loss.

Q: What types of insurance are available?

A: There are many types of insurance available, including: car insurance, home insurance, life insurance, health insurance, travel insurance, liability insurance, disability insurance, business insurance, pet insurance, etc.

Q: How does the insurance claims process work?

A: If you suffer a loss covered by your insurance policy, you must contact your insurance company to report the loss and begin the claims process.

You will need to provide information about the claim and the losses incurred. The insurance company will then assess the damage and determine the amount of compensation.

Q: How to choose the right insurance?

A: To choose the right insurance, it is important to consider your specific needs and budget.

You should also compare the different options available in the market, evaluating premium costs, deductibles and coverage limits. It is recommended to speak to an insurance advisor for personalized advice.

Q: What are the advantages and disadvantages of insurance?

A: Insurance can offer financial protection in the event of a disaster or loss. However, they can also be expensive and may not cover all types of losses.

It is important to understand the terms and conditions of your insurance policy before purchasing insurance.

Q: How can I save on my insurance premiums?

A: To save on your insurance premiums, you may consider increasing your deductible, bundling multiple insurance policies from one company, looking into discount programs for good drivers or homes equipped with a security system, or to call on an insurance broker to negotiate competitive rates.

✔️ In short

Have insurance – life, health and civil liability – is an essential element of financial planning. This can save you from financial difficulties in the event of unforeseen circumstances.

However, the decision to purchase insurance should be determined by three factors: the requirements, the benefits you get from the policy, and your ability to pay the premium. Before you leave, here is a premium training that allows you to build your business online.