Is Insurance Worth the Cost?
In these days of increasing risk and uncertainty, no one can deny the importance of insurance. Insurance will cover our financial needs when something bad happens and allow us to be prepared for the rare incidents that happen in our lives. The most important advantage to purchasing insurance is the peace of mind that comes with knowing that you are protected. The main reason people purchase insurance, is because of the fear of these unexpected events. The insurance companies understand this fear very well and try to offer several policies designed to protect us against the calamities. However, not all insurance policies are created equally.
There are several different insurance policies with a wide variety of options that you can choose from. Here is a list of more important policies with upsides and downsides to each one:
- Whole life insurance: Whole life insurance is the most established type of permanent policy on the market which protects the people that are financially dependent on you. A permanent life insurance policy as opposed to term life insurance is a plan that is guaranteed to pay out at some point rather than expire. The major advantage of purchasing whole life insurance is that you have to pay the same premium from the beginning. But the big problem is lack of involvement in investing the cash value saving. Also the premiums for whole life insurance are more expensive than a term policy.
- Health insurance: The increasing costs of medical care is an important reason to make health insurance a necessity. Although the soaring cost of health insurance is a financial burden, the potential cost of not having coverage is higher. Having health insurance gives you the opportunity to improve your health by providing a low cost way to attend physician visits and buying affordable prescription drugs if needed, but the high premiums of individual health policies can make it too expensive for some people.
- Auto insurance: Auto insurance protects the vehicle owner against financial loss in the event of a vehicle incident, such as a traffic collision. Car accidents are common and they happen quickly. The result of a car accident could be very tragic. If you own a car and get involved in an accident and someone gets injured or their property gets damaged, it could cost you everything you own to pay for the damage compensation. Having no auto insurance will save you only a little amount of money and puts everything else that you own at risk.
- Property insurance: Property insurance provides protection for your property against several risks, such as fire, weather damage or theft. Property insurance policies may include specialized forms of insurance like flood insurance, earthquake insurance, home insurance, etc. When purchasing a property insurance there are so many policies to choose from, and they all cost money. In many cases a certain amount of coverage is necessary, so you should choose carefully between the different options. In general, the policies that offer a wider range of coverage are a better choice than the ones that focus on specific incidents. So before you buy any policy, make sure to read it carefully and understand the terms, offers and costs.