Why is Insurance Important – Need & Types of Insurance
Table of Contents
What is insurance?
Insurance is a word that many of us know however, most of us don’t know about it in depth. But don’t worry it’s not as difficult to understand as the three golden rules of accounts so we will try to clarify it here. Insurance refers to the agreement signed between the insurer and the insured. The insurer agrees to pay a certain amount of money to the insured if a particular event or set of events transpires. In exchange, the insured agrees to reimburse the insurer for any damages or losses that occur in relation to these events.
Insurance comes in many forms, including property insurance, life insurance and health insurance. Some policies also provide coverage for liability issues with respect to bodily injury, property damage and lawsuits.
Importance of insurance
1. Helps protect your savings
Insurance is a type of investment that helps to protect your savings from unforeseen events or losses. It protects your savings by providing an income in the event of a loss or unexpected expense. It covers the investments and assets you have in the event of an accident, fire, theft or natural disaster. When you buy an insurance policy, you are insured against any loss that may occur during a certain period of time. The amount of coverage you receive depends on the type of insurance policy you choose and the amount of money that it covers.
2. Reasonable price
The companies have different rates depending on your age and gender. Some policies even offer discounts to senior citizens and those who are over 65 years old (or who are retired). Some companies also offer discounts for students with no dependents or those who do not own a home and have no car loans or other debts.
3. Supports your investment journey
Additionally, if you want to invest in stocks, bonds, mutual funds, and other types of investments, then purchasing an insurance policy can help protect your assets from any losses that may occur during this journey.
The companies have made it possible for individuals to invest in these types of assets without having to worry about losing everything should something happen to them or their family members during this time period
When you purchase a life insurance policy, it is considered an investment which provides financial security and peace of mind to you and your loved ones. It protects your assets so that they’re available when needed most, which can help boost your confidence when it comes to financial planning for retirement or other long-term goals.
In addition to the above benefits, life insurance policies come with tax benefits as well! This means that you’ll be able to claim an income tax deduction on the premiums paid for this type of policy if you meet certain criteria laid out by law. For a business owner, when you buy a policy, you can deduct the premiums as business expenses. This can save you money on your taxes and let you deduct part of the cost of your insurance policy.
5. Supports your family in your absence
This is an extremely important function of insurance.. An insurance policy can also provide financial stability for your family if something happens to you or if they need help with their expenses while they are unable or unwilling to work or earn money.
You will be able to provide for them financially without worrying about the cost of their care or education while they are away at school or college.