Insurance and Its Importance to You
Some people take insurance cover for granted thinking that having enough money is enough to replace their assets in case anything happens. However, the truth here is that the amount of money incurred after an accident, demise, or a far-reaching disability transcend your savings or wealth. This makes it important to have an insurance cover, especially when it comes to your financial planning. Having an insurance cover is much better than using your savings to cater for loss or damaged assets. You need to understand the different purposes of long and short-term insurance for you to have a guarantee that you are correctly insured.
Insurance for Your Assets
When it comes to your assets, the insurance company must ensure that you do not incur any additional expenditure at the time of the incident. The idea is to ensure your financial position is not affected in any way. You can have a short-term insurance contract that protects any movable asset that you have in case of any loss or damage. For instance, you have to ensure your car or your home.
You can also have a long-term insurance contract that protects your earning capability. This means that in the event of your demise, disability, or retrenchment, you are protected
Understanding Captive Insurance
This is also referred to as an insurance subsidiary and is subject to the regulation of the government. It is also required to file statements with any governmental body, official, or agency, which regulates insurance companies. A captive insurance company refers to a wholly owned subsidiary company that offers risk mitigation services for its mother company. It can be formed if the parent company cannot outsource from another firm for insurance of their business risks.
Importance of Life Insurance
Having a life insurance policy is crucial especially if you are married and have children who depend on your finances. With a life insurance cover, older adults can also plan for their final expenses and burial costs, that is if you are okay with such a move. You need to have life insurance because:
It can assist in replacing your income. If you are the main source of income in your family, losing your job can affect your family financially even if you are not the only one earning. Some of the domestic tasks may depend on your income like house needs. If you have a life insurance cover, your financial position will not be affected even if you lose that job.
It can help in servicing your debts. Most of us, if not all, have some debt, be it a mortgage, credit card debt and so on. If anything, tragic happened to you suddenly, that burden falls on the shoulders of your family. If you have a life insurance cover, you are at peace knowing that everything is catered for.
It helps with your children’s education. You want to take your children to schools that you can afford. If you want to meet the financial expectations of your children’s education, you need to have a life insurance cover.