Posts Tagged bankruptcy
How Insurance Saves You Money
The moment you start earning and think about a secured living, your thoughts are centered round insuring yourself and your family against untimely death, accidents, theft and loss of assets in many other ways. But after some time, it seems to be a pain in the neck. You feel as if you are paying premium on many polices without availing the payback from any one policy. In fact, if there was some way we could see the future, then we would insure accordingly. But since this is impossible, we have to incur the cost of having a number of insurance policies at the same time.
But then, what if a disaster occurs? In that case, you will not lose thousands of dollars but get this amount back from the insurance company. This is because the company allows you to pool risks with many other people, thus causing a reduction in costs and risks for everybody. Actually, the chances of a disaster are very remote, but they cannot be totally ruled out. Out of the many misfortunes like getting cancer, the house getting damaged by a super cyclone and your car getting smashed in an accident, you are likely to go through at least one of them in your entire lifetime. But since you have no idea about which one, you have to insure against all of them.
But even one of these disasters can lead you to bankruptcy. By making an insurance policy, you can shift the risk of such a disaster from yourself to the insurance company. And for this coverage, you have to pay a premium on the secured amount. These companies are better equipped to handle the risks by virtue of having better finances. So, on an average, you pay less to the insurance company in the long run, than you pay if you incur the losses. Some may benefit much more than the rest but on an average, you save a lot of money. So brace yourself the next time you pay your premium and be thankful that you have insurance.