Insurance is a vital financial focus in today’s complex world. Failure to have sufficient insurance is the quickest and easiest way to accrue mass debt. Nothing will make your business, car, house, family, or self more vulnerable or susceptible to financial strain than a lack of adequate insurance.
However, paying too much for insurance can be a financial strain in itself. And paying for insurance that is not needed is just money down the drain
If you own anything which cannot be easily replaced without economic hardship, it should be insured.
1. If your house burned down, what would you do?
2. If you lost your job due to disability, would there still be food on the table?
3. In the worst case, would your family be provided for if you passed away?
These are tough scenarios to imagine, but they happen every day. It is important to understand the consequences, but it is more important to stay prepared. Some people tend to think of insurance as a luxury, which is not true at all.
Insurance is simply a way to avoid an impoverished state.
Like many things in life, the decision to purchase insurance or not is based on a system of risk and reward. Unfortunately, consumers often look at the reward and ignore the risk altogether. This can impede the process of making an educated decision.
For example: Lottery is a very popular system of risk / reward. In this case, the risk is generally small, but the reward can be great, making it a popular choice.
Gambling in casinos is another example. In this case, some people become so fixated on the reward that they forget the risk of losing.
Think of insurance as an inverted version of the lottery. The reward (not paying for insurance and therefore saving an immediate expenditure) is miniscule compared to the possible risk (losing everything you own and being in debt for the rest of your life). And sadly, the chances of your number coming up in the insurance game are a lot greater than your chances of winning millions.
It is said that insurance is the most boring thing in the world until the day you need it when it becomes the most exciting!
a) Security of Our Future
b) Security of Our Finances
c) Security of Our Loved Ones
Securing the above for yourself and your family is why Insurance Planning is important.
Insurance, simply put, is the cover for all the risks we run into during our lives. Insurance enables us to live our lives to the fullest, without worrying about the financial implications of events which will otherwise hamper Ourselves and our family