24 June 2021

Insurance is a contract from which an individual or an entity receives financial coverage or compensation from an insurance company. The insurance company aggregates the risks of its clients to make payments more reasonable to the insured. Insurance is an important financial tool, which can help you to live your life with fewer worries knowing you will receive financial assistance after a disaster or accident occur helping you to recover faster.

While we wish to have financial support at some point in life, such as when raising a family or maybe when starting a business, however, when comes to financial support we tend to believe that savings are enough to be financially stable, but, if you look at life from a practical perspective, you would realize that savings alone are not enough to achieve financial stability, hence the need of insurance which provides you with a financial cushion that helps you to take care of yourself and your loves when you need it the most is desperately needed like never before.

As mentioned above, some people believe that they do not require general insurance to save enough money to replace their assets should anything happen to them. general insurance company offers insurance policies to secure health, travel, motor vehicle, and home.
But, consider a situation that you have to use all of your saving to pay for your needs also, financially secure in facing any type of problem in life, this is why insurance is a very important part of financial planning. Furthermore, the below benefits proves why we should have an insurance policy.

Financial Stability

No matter how much you have saved, an unexpected event can dent your financial position in a moment. So, the best way to become financially stable is to cover yourself, your family, and your assets with insurance. You can purchase insurance and receive a payout for financial support for unforeseen event.

Just Beginning to Earn

If you’re beginning in your career, you are certainly aware that it is important to insuring significant assets such as your car.

Your ability to earn an income over your lifetime, on the other hand, is your most precious asset. As your salary rises or you take on more debt, such as a home loan, it becomes increasingly important to have adequate income protection insurance and possibly life cover in place.

Risk Distribution

The insurance contract is based on the “concept of financial risk transfer from the insured to the insurer.” As an insured, you pay premiums in exchange for compensation from the insurer in the event of a covered occurrence. As a result, obtaining insurance lessens your financial stress.

Any unforeseeable disaster can put you under physical, mental, and financial stress. As a result, if you have insurance, you can cover the consequences of such disasters. With insurance in place, any financial concerns will be addressed, allowing you to concentrate on your recovery.

Completely safe for You and Your Family

Family is a valuable asset, and they rely on you for financial support as well. Therefore, it’s critical to ensure that you and your family are well prepared to deal with any uncertain movements.

Let’s say you die an untimely death at a time when you still have multiple milestones to complete, such as your children’s education, marriage, and a retirement fund for your spouse. Your untimely demise can put your family in a struggle. However, if you had purchased term insurance after considering all these issues, your family would be able to weather the storm.

Meanwhile, if you or your family lacks adequate health insurance, large medical expenditures paid after any treatment might destroy your finances stable. Therefore, you must ensure you and your family adequately.

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 case of an unforeseen event. So, when you have insurance, you know that you are secured against any unforeseen events in life, which gives you complete peace of mind.

An unforeseen event can entirely turn your life upside down, leaving you physically, mentally, and financially burdened. Having insurance helps because you don’t have to worry about money during such a difficult period and can concentrate on getting better.

Final Consideration

The sum of all of these considerations is sufficient to justify the need for insurance. Having insurance to secure you and your family, your assets while giving financial freedom and peace of mind.

Hence, understanding your current needs and ensuring you have the proper type and level of coverage as you go through life is the key to picking the correct insurance. It is equally critical for you to select an insurance partner who uses the right technology to serve you, as technology is the key to customer success in the 21st century and in the decades to come.

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Written by Siththy Waseema