Investing in insurance is an integral part of responsible financial planning for both individuals and businesses alike. In the text below, we will explain exactly why it’s a good idea to acquire one, or multiple, insurance policies in order to ensure the maximum levels of protection against all possible eventualities. We’ll take a deep dive into some of the most common types of insurance coverage, reasons to opt for insurance as well as offer tips and tricks on how to get the best value for your money.
Insurance Safeguards your Future
For a small fee, an insurance company promises to help get you or your business get back on track if, for example, you become critically ill, fall victim to theft, suffer catastrophic damage to your property, or even if your employees suffer from burnout. As is stipulated in the contract which is signed between yourself and the insurance provider, you are only eligible to receive assistance for the assets covered in your policy.
In the majority of cases, however, policyholders never actually make an insurance claim or request a payout. What they get in return is a sense of security, and piece of mind. You did not work hard for years only to have your personal savings, or indeed business profits, depleted instantly due to one of any number of unforeseen and life changing circumstances. The global insurance industry has developed enormously both in breadth and complexity. Having said that, it is possible to take out an insurance policy to protect a whole range of your belongings; ranging from your home, luxury belongings, car, pets, and most importantly, the health and wellbeing of your family.
If any of this sounds a bit daunting, there’s no need to worry. Insurance professionals, referred to as agents or brokers, are tasked with helping policyholders navigate their way through the insurance landscape. They will help you identify which insurance policy suits you best, and walk you through the necessary steps which are required in order to effectively protect yourself and your assets. Brokers tend to have hundreds or thousands of clients at any given moment in time, so keeping a clear and consistent line of communication with them can be challenging. Forward thinking and prudent brokers stay ahead of the curve and cope with this workload by employing the services of communication automation platforms. These platforms provide brokers with automatic, triggered email campaigns that keep you, the client, updated with regards to your personal insurance policy. For example, they keep you informed about important upcoming dates with timely billing reminders and pre-renewal letters, and they also give you access to all of your policy documents through a dedicated self-service portal which is found on your broker’s website. For these reasons, and many more, it is important to work with insurance professionals who are actively using the most up-to-date technologies which are available on the market, as this significantly improves the quality of service you will receive whilst being their client.
Insurance Can Protect All of the Most Important Aspects of Your Life
It’s not unusual for people to have several types of insurance to their name, and entire families can be covered under one policy. This means that, even if your teenager gets into a mild fender-bender, insurance companies will pay for legal fees and any damages to one or both vehicles. Sometimes, insurance is even mandatory. In the U.S., for example, people are required by law to carry their auto insurance policy.
The most common types of private insurance are homeowners, auto, life, and health insurance.
Homeowners insurance protects you from named perils such as a fire or theft. Some damages, such as floods, earthquakes, and sewage backup coverage have to be purchased separately as a part of your homeowners insurance.
Auto insurance usually covers liability for bodily injury, damage to the other driver’s car, and legal fees in case of a lawsuit. You can add cars and drivers to your auto insurance policy.
Life insurance provides financial assistance to your family or another beneficiary of your choice in the event of your death.
Health insurance, which is usually partially or fully covered by your employer, pays for prescription medication, visits to the doctor’s office, or hospital stays.
Business Insurance, or commercial insurance, protects business owners from any losses that are likely to occur during a normal course of business. This includes liability insurance that protects against damages you cause to others due to negligence, mistakes, or failure to perform. It also includes property insurance, which covers damages to assets such as furniture, or work equipment.
Insurance Pays Off in the Long Run
The core financial components of every insurance policy are the policy limit, the deductible, and the premium. These determine how much you will be required to pay for your insurance, and how much money you may receive as an insurance payout.
A premium is an amount of money you are meant to pay monthly, quarterly, seminally, or annually. If you fail to pay your premium, your insurance policy will lapse, and the policy can get terminated.
A policy limit is the maximum amount of money your insurance policy promises to provide. There are two types of policy limits: per-occurrence limits: or the maximum amount of money the insurer promises to pay per incident, and aggregate limits, which cover all claims for a specific policy period.
A deductible refers to the amount of money you agree to pay out-of-pocket before your insurance kicks in. Your insurance company will only agree to offer financial coverage once you have reached your yearly deductible.
Imagine, for example, that you suffer a $10,000 loss in property damage following a fire. A loss such as this one would be detrimental to an average American’s savings of around $3,500. With only a $500 deductible, your insurance company could write you a check for $9,500. This is how insurance helps you stay afloat.
Investing in insurance policies is the most affordable way for you to protect your assets and your lifestyle from potential losses. Understand exactly what your policy covers and which are the risks you are the most likely to face, and enjoy stress-free, long-term financial security for you and your family.