The importance of having insurance

When you have worked hard for everything you own, you need to make sure it is protected in case anything bad happens. Things like car accidents, property damage, illness and death can happen to anybody, and if you don’t have insurance, you could end up with real money worries.

Insurance protects you against risk
Every day, you and your family are exposed to risks that could cause you to suffer financially. These include:

  • The risk of dying and the financial impact this will have on your surviving family.
  • The risk of losing your car or home due to loss or damage from accidents, fire or theft.
  • The risk of having an accident or serious illness that could stop you from being able to earn a living.
  • The risk of not being able to pay off your debt if something happens to you.

Having insurance will help you to deal with these risks without putting a strain on your finances. That’s because when you buy insurance, you transfer the cost of a potential loss to the insurer in exchange for a fee, known as the premium. Insurers then invest this money in order to pay you out if you have a claim.

Types of insurance
Most banks offer different types of insurance to protect you against risk, including:

  • Life insurance – to make sure your family has money after your death. (If your bank does not offer life insurance, you should get a quote from a reliable insurance company).
  • Home and car insurance – to protect your house, its contents and your car against loss or damage from accidents, fire or theft.
  • Funeral insurance – to cover funeral expenses after the death of a loved on.
  • Loan insurance – to pay off your debt if anything happens to you.
  • Accident and Health insurance – to protect you against the cost of serious illness and accidents.

It pays to shop around!

Make sure you get at least three quotes from different insurers before you buy any type of insurance policy. Getting quotes before you buy can help you get a better deal!

Next article: More about Life Insurance