Why should you have insurance?
In the simplest terms, insurance offers financial protection for various emergencies. It’s a safety net that you can fall back in times of need. However, you may already be aware of this and are still not convinced that you need insurance. Why insurance is needed might be a question that keeps you up at night, especially, if you have a family to support. In this article, we will cover all the reasons to have insurance.
Work Coverage is Insufficient
Some organisations provide insurance to their employees like a perk. However, such insurance coverage is usually very basic. The plan offered to employees often covers a single individual and is inadequate for families. Furthermore, only health insurance is offered, which only covers basic illnesses. Other insurance plans like car, home, and life insurance are not at all offered by organisations.
Insurance offered by most organisations are insufficient in today’s world.
You can’t predict the Future
Emergency situations are bound to happen. You get into a car accident. Your home experiences a natural disaster. You’re onset by a sudden illness. When such situations occur, having the right insurance is more than your safety net. It’s your plan to deal with such situations. Predicting the future is next to impossible, however, insurance certainly makes sure that you are prepared no matter what.
Prevent any Debt
When emergency situations occur, it can cause a serious financial strain on the bank. For example, dealing with a medical emergency can be very expensive. The only option in such emergency scenarios is to borrow or take a loan. The problem with this solution is that you take a loan at a high interest rate. You not only take on debt, but you have to pay back more than the original loan.
Depending on the loan amount, you can spend the next 10 years paying for it.
Insurance provides financial assistance in such moments – so you aren’t required to take a loan.
Secure your Home
In direct connection with the above debt point, insurance helps you secure home. During emergency situations wherein you require a lump-sum amount and have to take a loan, you might offer your home as security. This is quite risky. You may have difficulty in repaying your loan and this leads to serious complications.
Protect your Family
Insurance plans are available that provide family coverage. If a family member is in an accident, an insurance plan ascertains that you do everything possible to deal with the situation. You do not have to stall on gathering funds and such.
Furthermore, life insurance is vital if you are the earning member in the family. A situation may arise wherein you cannot provide for your family. This might be due to a crippling or a fatal accident. Life insurance provides passive income for your family to get by.
Secure your Business
If you operate a business, then insurance is a must. There is an inconceivable number of things that can happen to your business. It might be affecting by natural disaster, theft, legal action, and more. Running a business is a liability, but that’s no reason to not run a business. Having a business insurance is just a method of operating your business regardless of what trouble it is in. It ensures the success of your business.
Protect your Assets
Any property and vehicles you own are financial assets for you, which need to be protect. Having insurance on your home, vacation property and vehicles is a sure and easy of making certain repairs when required. This keeps up the value of your assets if ever you wish to sell them.
Peace of Mind
Insurance might seem like a financial burden which you have to pay every month. However, in retrospect of an emergency situation, you have an insurance to fall back. Instead of worrying about the financial aspects, you deal with the situation at hand. Insurance is one of those financial plans which seems pointless except when the emergency situation affects you.
What Types of Insurance Coverage should you have?
At the heart of why insurance is needed is the fact that it just makes financial sense. You can’t always depend on the Government of Singapore or your work organisation to support you. A good insurance plan is your fall back during emergencies.
With all that being said, the next thing you should think about is what are the different types of insurances you can have.
- Home insurance
- Vehicle insurance
- Health insurance
- Life insurance
- Business insurance
These are the most basic insurance plans which you should consider having.
So, the next time you ask the question, why insurance is needed, you know the answer.
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