Why is Getting Insurance an Important Financial Decision?
- Author: Monica Jackson
- Posted: 2024-06-21
Financial planning allows you to plan for both long-term and short-term goals. A lot of people underestimate the role that insurance plays in planning for personal finances. Choosing a good insurance plan is fundamental.
As we move through life, unforeseen tragedy may occur. Therefore, it is important to ensure that your greatest assets are insured. Below are reasons why insurance matters:
- A legacy to leave behind. You're able to secure the financial future of your children.
- Gives you a sense of security and peace of mind. Knowing that you and your family can get medical care is fulfilling.
- You can enjoy financial security
Home Insurance
Your home is probably one of the most valuable possession you own. Moreover, you've probably spent years just saving for it. It contains not just your belongings but also your memories. It is okay to put up the best security measures in place.
However, there's still the risk of theft, damage, or destruction by natural calamities. In case of damages, the cost of repairs will have a significant impact on your finances. In the worst-case scenario, you might end up losing your entire investment.
Home insurance is available in building insurance, content insurance, and a compressive plan including both. Content insurance allows you to protect your valuable possessions. The following are examples of items covered by content insurance:
- Computer/TV and other electrical items such as fridge
- Pictures and paintings
- Clothes
- Jewelry
Some policies will even cover mobile phones and bicycles. Building insurance covers the cost of building structures and fittings such as radiators and baths. Having home insurance allows you to enjoy your home without worry.
Health Insurance
The covid-19 pandemic has made many realize the importance of health insurance. It has caused many to understand medical emergencies are unpredictable. Moreover, they can have a significant impact on personal finances.
Getting medical insurance for you and your family can be an added protection. Other than protecting your finances, it helps beat medical treatment inflation. Below are the important reasons for getting medical insurance:
- To fight lifestyle diseases. Lifestyle diseases such as diabetes, heart disease, obesity, and respiratory problems are on the rise. Pollution, stress, and unhealthy eating habits are among the many contributing factors. Investing in a good health plan covers the medical expenses allowing you to worry less.
- To safeguard your family. When choosing a health plan, it is crucial to ensure it covers your family. Consider covering your aging parents who are more vulnerable to illnesses. Ensure you do thorough research and talk to experts to get comprehensive coverage.
- To deal with medical inflation. As medical technology improves, the cost of treatment increases. Thus, this can cause a huge strain on your finances. It's possible to beat the burden of medical inflation by having affordable premium health insurance
- To protect your savings. Getting health insurance protects you from digging into your savings. Additionally, it allows you to gain tax benefits hence increasing your savings. Your saving, therefore, can be used for the envisioned purpose, such as buying a house.
In today's fast-paced lifestyle having a health insurance is essential.
Life Insurance
Life insurance is not only crucial to your family but also to you when you retire. Life insurance is cheap, depending on your coverage. It gives you comfort that money will be available to protect your loved ones. The money is non-taxable and can be used to cover loans and mortgages.
Ensure you talk to your financial advisor to advise on the best coverage for you. You can start small and re-evaluate as your life goals evolve. You're never too young to get life insurance. Here are the reasons why getting life insurance while young is important:
- You plan to have children
- You want to get married soon
- Support your aging parents
- You're a small business owner. Your employees and shareholders will still get paid in case of your absence.
- You have debt. Ensure you include your total debt when getting an insurance cover. It ensures that your student loans and mortgage is paid.
Car Insurance
Car insurance is fundamental to drivers in most parts of the world. The insurance protects you and your family from huge financial expenses. In case of an accident, you want to know that your car and bodily injuries are covered.
Excellent car insurance saves you time and gives you peace of mind. It supplements your health insurance and covers dental expenses in case of an auto accident. Insurance companies are different. Therefore, it is essential to read and fully understand what you're covered for.
