Despite how much awareness is being spread about insurance, it’s surprising to note that many people still don’t know much about this life-saving scheme. As one of the pillars of personal finance, insurance should be an essential part of every household - it deserves a mention at the table. Most people don’t get into insurance, especially life insurance, due to how complicated it seems. However, we will try to clear up a lot of skepticism and confusion that surrounds life insurance, and insurance in general. Here are seven things you probably didn’t know about insurance.
- You need life insurance if you have dependents
If you have dependents that may be exposed to a lot of suffering if you were to be no more, life insurance is a great way to secure their future. This becomes even more important if you have an ex-spouse who is allergic to taking the financial responsibility of your dependent children. In other words, this is a strategic financial tool that could set up your family with stable finances.
- Insurance is not just applying a monetary value
When you get life insurance, it’s not just about applying a monetary value to your life, but it is more about eliminating the financial consequences ofthe sudden loss of life. Someone with life insurance can help those left behind to clear up educational expenses, outstanding debts, lost income, and the cost of final rites. It can also help the family members deal better with the loss when they are not worried about substantial financial burdens.
- Carrying out proper research helps a lot
Do you really know what an insurance policy covers? Most people dive into getting one without fully understanding what’s written in the fine prints. Insurance companies have different rules but with the same framework. Therefore, for any company you decide to get your insurance from, you need to fully understand how they intend to protect you and your property. Search for a company that takes the time to educate you about their policies and offer reasonable rates. You can only plan effectively when you know what your insurance policy covers.
- Insurance is not an investment tool
Getting an insurance policy serves as a risk management tool. You should have considerable money in your savings, have an education savings plan if relevant, and have paid off most of your debts before considering taking insurance. It should not serve as a replacement for any of these.
- Insurance is not always expensive
Most people believe that getting an insurance policy is extremely expensive. However, this is not always true. Of course, the amount spent on getting life insurance will be different for a healthy male in his thirties who has no history of illnesses and a diabetic patient in his 40s. Getting coverage will be different based on the risks involved.
- You don’t have to be sick before taking health insurance
Another general notion is that health insurance is too expensive and not necessary if you’re healthy. It doesn’t matter how young you are; health insurance is important. Those with this insurance can pay less for medical services than those who have no insurance. Some plans help you handle insurance payments without going bankrupt.
- Not all car insurance policies offer full protection
Some companies allow you to pay the bare minimum for car insurance, which may seem like a discount. The sad thing about this is that it may only protect the person involved in the accident. This means that your car may not get the comprehensive cover it needs. So, be sure to check this.
When it comes to insurance, knowledge is power. Be sure to carry out detailed research before opting for any insurance policy.