Why is Insurance Essential in Terms of Financial Planning?
Why is Insurance Essential in Financial Planning? Risk is everywhere, there are some we can prevent but mostly are unpredictable. I know you already heard of the word 'insurance'. For younger generation insurance is not yet a big deal or let me say some just ignore it. When we become older, having families and getting weaker that's the point we are interested in insurance, some are even had regrets of not getting an insurance. There are some who are already aware of the term insurance, there are actually a lot of types of insurance that an individual should have. Every insurance have its own function that will suit every persons needs.
What is insurance?
According to Investopedia " Insurance allows individuals, businesses and other entities to protect themselves against significant potential losses and financial hardship at a reasonably affordable rate. We say "significant" because if the potential loss is small, then it doesn't make sense to pay a premium to protect against the loss."
In this post, I round up the importance of getting an insurance and why we need to get it.
Why You Need An Insurance?
1. It Provides Safety and Security - There are a lot of foreseeable events that surrounds us and we are clueless of what will happen to us and out properties. Insurance gives as safety as well as security. One example of this is when the provider of the family died, the family will still receive support or financial assistance.
2. Keep Worries Away - Insurance help in keeping your worries away and create a peaceful mind. It's like you have something to lean on when unexpected event occur.
3. Leave Inheritance - One good thing about insurance is that you can leave it as an inheritance to your love ones. You can secure insurance policy to give to your heirs or to any family member. There are a lot of insurance company who offer this kind of insurance policy.
4. Serves as an Investment - Insurance does not limit its benefits to cover unexpected expenses but also serves as a channel for investment. Insurance is a great form of retirement investment which we all needed, also as a tax strategy.
5. Pay Immediate Expenses - Insurance can pay off debt and other expenses specially immediate expenses.