What is insurance?
Insurance is a financial safety net, helping you and your loved ones recover after something bad happens — such as a fire, theft, lawsuit or car accident. When you purchase insurance, you’ll receive an insurance policy, which is a legal contract between you and your insurance provider. And when you suffer a loss that’s covered by your policy and file a claim, insurance pays you or a designated recipient, called a beneficiary, based on the terms of your policy.
The most difficult thing about insurance is that you’re paying for something you hope you never have to use. Nobody wants something bad to happen to them. But suffering a loss without insurance can put you in a difficult financial situation.
What are the benefits of insurance?
Insurance is an important financial tool. It can help you live life with fewer worries knowing you’ll receive financial assistance after a disaster or accident, helping you recover faster. When it comes to life insurance, this could mean your family doesn’t have to move out of the house or that your kids can afford to go to college. For auto insurance, it could mean you have extra cash in hand to help pay for repairs or a replacement vehicle after an accident. Insurance can help keep your life on track, as much as possible, after something bad derails it.
Your independent insurance agent is a great resource to learn more about the benefits of insurance, as well as the benefits in your specific insurance policy. For example, you may have access to perks such as free roadside assistance, risk control consulting for businesses or cash value in a life insurance policy, in addition to your insurance coverage.
And in some cases, like auto insurance and workers’ compensation, you may be required by law to have insurance in order to protect others.
How do I choose an insurance provider?
Here are a few things to consider when choosing an insurance company to work with:
- Insurance coverage.What types of insurance does the company offer? Can you buy all of your insurance through the company and receive a discount?
- Financial strength.Would the company be able to pay your claim? Look to U.S. credit rating agency AM Best to determine the company’s financial strength.
- Agency model.Would you prefer the help of a local insurance agent? Or would you prefer to manage your insurance on your own?
- Customer service.Do others recommend this company? What are people saying about it in online customer reviews?
Benefits of Insurance
Insurance policies benefit people as well as society as a whole in various ways. Along with the obvious benefits of insurance, others are not much discussed or talked about.
1. Cover against Uncertainties
It is one of the most prominent and crucial benefits of insurance. The insured individual or organizations are indemnified under the insurance policies against losses. Buying the right type of insurance policy is indeed, a way to get protection against losses arising from different uncertainties in life.
2. Cash Flow Management
The uncertainty of paying for the losses incurred out of pocket has a significant impact on cash flow management. However, with an insurance policy by your side, you can tackle this uncertainty with ease. The chosen insurance provider pays in the event of happening of an insured event whenever they occur.
3. Investment Opportunities
Unit linked insurance plan, , invest a part of the premium into several market linked funds. This way, they enables you to invest money regularly to benft of market linked returns and fulfil your life goals.