Ten Reasons Why Insurance is Important

Why Insurance is Important
Why Insurance is Important

You insure your car and your home. But nothing is more important than your life and your ability to make a living. So it makes good sense to insure your greatest asset – you!

As we move through life, find a partner, raise a family, and maybe start a business, the importance of insurance in a long term plan increases. That’s because insurance is all about providing a financial safety net that helps you to take care of yourself and those you love when you need it the most.

Insurance is tricky. It's not like buying a chair or a shirt or groceries. When you buy insurance, you're buying a promise. It's a promise that if something catastrophic happens to your business, your carrier is going to assist you to make your business whole again. Sometimes, though, it's tempting to question the value of insurance because it is an intangible product.

Insurance is important because it protects a person or entity from extreme financial loss or responsibility due to an unfortunate emergency, accident or negative unforeseen event. There are many different kinds of insurance, some of which cover a person and some of which cover businesses and other entities.

Let's back up and take a big-picture view of why insurance matters. Here are ten reasons why insurance is important. 

10 Reasons Why Insurance Matters

Why is insurance important? Let’s look at ten key reasons.

1. Insurance meaning protection for you and your family

Your family depend on your financial support to enjoy a decent standard of living, which is why insurance is especially important once you start a family. It means the people who matter most in your life may be protected from financial hardship if the unexpected happens.

2.  Insurance reduce stress during difficult times

None of us know what lies around the corner. Unforeseen tragedies such as illness, injury or permanent disability, even death – can leave you and your family facing tremendous emotional stress, and even grief. With insurance in place, you or your family’s financial stress will be reduced, and you can focus on recovery and rebuilding your lives.

3. To enjoy financial security

No matter what your financial position is today, an unexpected event can see it all unravel very quickly. Insurance offers a payout so that if there is an unforeseen event you and your family can hopefully continue to move forward.

4. Insurance Grants Peace of Mind

Insurance, an intangible, provides another intangible: peace of mind. Business owners can take on certain business ventures because they can shift the risk — thanks to insurance. This reason is the counterpart to No. 2 — lenders require insurance. Insurance is the required (by lenders) safety net that lets entrepreneurs explore opportunity.

5.  A legacy to leave behind 

A lump sum death benefit can secure the financial future for your children and protect their standard of living.

6. Lenders Require Insurance

Lenders require that you have insurance. Think about it: Mortgage lenders want proof of insurance before you buy or build a new building. In short, to get the money your business needs to keep going, it’s likely you enjoy the benefits of insurance. Without insurance, your winning business model can't get the funding it needs to take its first step, or your established business model can't get the funding to evolve and better compete.

7. Insurance is Compulsory in Some States

Insurance is important because sometimes it's the law! A great example of this is auto insurance. Auto insurance is compulsory in Wisconsin. Auto insurance helps mitigate the risk of life on the road. Workers' compensation is a form of compulsory insurance that's required in most states.

8. Insurance Ensures Family and Business Stability

Insurance is a safety net for when risks go wrong. Life insurance can support the life of a family, should a member be lost. It’s similar for a business. Should a key member or piece of equipment go out of commission, the business can carry on, thanks to insurance. This reason why insurance is important dovetails nicely with peace of mind (No. 4). It all goes back to the idea that insurance, when activated, makes policyholders whole again.

9. Insurance Protects the Small Guys

With insurance, however, the little guys have support if they want to take a risk, which means they stick around longer. What it comes down to is that insurance helps prevent monopolies from forming.

10. Insurance is the Right Thing to Do

A sobering example of insurance in action is the West Fertilizer Co. explosion in Texas this spring. The explosion did $100 million in damage to the community, including schools and hospitals. The fertilizer company had only $1 million in general liability coverage.

Now the city is suing West Fertilizer and likely will win all of the company’s remaining property and assets that were not damaged by the disaster. This is because the fertilizer company did not have enough insurance. What’s more is the city also is suing the suppliers to the fertilizer plant, claiming they knew they were supplying inherently dangerous materials. In the case of the West, Texas, plant explosion, insurance could have helped a community to recover after a crisis.

Insurance is something many business owners don't want to think about. But whether they think about insurance, with hope it's there, allowing for transfer of risk and providing a safety net for new opportunities.

Every day we face different problems like natural and uncontrolled human activities which could lost our ,millions of property. Therefore to overcome those property insurance is important. As insurance is the main way of business and individuals to reduce financial impact of a risk occurring in the near future. There are different types of insurance,as homeowner insurance,vehicle insurance,life insurance,animals and crops insurance.So, if we face the problem in the near future then we may overcome the value of it if we have done insurance of it.

Home insurance is important because if the natural disaster like,flood ,landslide,fire damages the property of the home then it could be overcome but some may be expectation.  This type of insurance is famous all over the world.

Identity theft insurance is also becoming popular in these days because if the you lost your identity card then other impersonal may use it and take advantages.Even the criminals are using this card to withdraw the bank balance and rent a house along with the information in it to get the job.It can be avoided by the following points:

you must keep the amount of personal information in your purse or wallet to the bare minimum. Carrying of additional credits cards and your social security cards or passport unless it is very much essential.

be careful do not give out the personal information,whether on the pone or on the social medium unless you have initiated the contact or sure you you know whom you are dealing with.

You probably should shred any documents containing personal information such as credits cards numbers bank statement,charge receipts or credit card application,before disposing them.
If you are victim of a crime ,report to the police station or credit card company as possible as you can to secure your credit card .

Animals insurance is also essential for us,more essential for farmers because if you love your pets or you are doing the farm of animals then you must probably benefited.If animals get sick then the insurance company  obviously help you.So, it is also important.

Vehicle insurance is the most popular insurance in the world.If you have done the insurance of the vehicles then you may be overcome it if your vehicle get accident or got theft.So motor vehicle is also essential.

Therefore, insurance is very much essential for us. Everything we lost would be overcome and it makes our life much easier and safer.

Fundamental Insurance Concept

The word peril, loss and hazard terms sound synonymously but the words used in the insurance are quite different and those words should be distinguished carefully. As the insurance is the unseen and unintended loss to the owner and for the organization. For instance, if the price of the gadgets decreases by the value of market or be by its ages. Although the decreases surely lost made the loss, but the loss in the term of insurance is not called as loss. Additionally for instance, if destruction of the same gadgets is done through the fire then it is unintended and unseen and so we can consider it as loss.

Insurance fundamental

Common loss exposure is listed below;
  • Personal
  • Liability and
  • Property

Personal Losses

The injury, illness, and premature death are the example of it.

liability losses

The property which we cannot become legally responsible to pay back for injuries or other damages property. For instance, you have a pet and that pet harm others. For eg if you have a dog at home and that bites children, then probably you should be liable for the child heath. Additionally if you have a bike and you accidently have a accident and held you as a fault, then probably you may have to liable to pay for the damages you have caused. 

property losses

The property loss by the unintended accidents like, fire, vehicle accident, storm damages that brought to the business are mentioned as property loss. It involves the destruction of commercial or let it be personal.

1 comment for "Ten Reasons Why Insurance is Important"

  1. Insurance is tricky. When you buy insurance, you're buying a promise.