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Why insurance cover could be a necessity
What you need to know:
- While it is understood that insurance will not stop accidents from happening, or people from getting sick, or deaths from happening, but having a cover cushion those who suffer losses from availing funds to cover for the insured losses.
To start with. Do you really need to have an insurance cover (i.e., for your property, motor vehicle, business, education, health, life, etc)? and have you ever wondered whether it is necessary that you should have an insurance cover? By the way – do you really understand what you are being covered against? Either way, it all starts with, what is an insurance cover? Answers to these questions would be yes – of course you need to have an insurance cover; yes – you need to understand what the insurance policy is covering or protecting you against; and yes – there is a need for you to understand the needs and benefits of insurance so as to make an informed decision before purchasing that cover or policy.Insurance operates based on the fact that losses and misfortunes do occur in people’s lives, and at any moment.
This is informed by the wisdom saying it is better to plan on a rainy day, as you plan for a sunny day – perhaps, to minimize or manage the negative impact of the loss, should it occur, and when it occurs.
Now, there are various religious teachings and other wisdoms that underscore the necessity of insurance as a financial planning tool, as a risk mitigation and management mechanism.
One may argue that in our traditions and conduct of life, we do sometimes set up and practice acts that enable the pooling of resources and help those in need, so why insurance? Well, much as that is true but these practices are not sustainable as it were, hence the necessity for individuals and businesses and governments to purchase proper insurance covers as the real means of mitigating risks and losses.So, what is it? you need insurance because losses and misfortunes occur from time to time, and in most cases when such incidents occur – i.e., fire, motor accidents, sickness, or death, you are not prepared for the financial consequences that follow.
It is not uncommon to see people resort to borrowing or asking for help from friends and relatives who unfortunately are often short of money to lend a hand and therefore do not help as such, and by itself results in more stains in relationships.
In extreme cases, it is common to see families dispose of their hard-earned assets at throw away prices because of the mentioned emergence situations.
It is sad to see when such assets are sold to pay medical bills for the patient whose bills need to be paid off when s/he has died.
No doubt this is a double, or triple tragedy, if the person died was a bread earner for the family, the family which is now left with no assets and their beloved one.
While it is understood that insurance will not stop accidents from happening, or people from getting sick, or deaths from happening, but having a cover cushion those who suffer losses from availing funds to cover for the insured losses. By what has been said above, and in our own experiences, we know that life has a lot of uncertainties.
By buying an insurance policy, you transfer financial losses from yourself to an insurance company, which has the role of pooling clients’ risks together, making payments more affordable for the insured.
So, while you cannot avoid the misfortunes of life, you can be assured that with the right insurance policy, you will recover from your financial loss.
After all has been said, the bottom line is you need to have an insurance cover that is relevant to you and the risk you are mitigating.
How would you achieve that? By identifying your risk(s) and your needs and setting priority around them – remember, not all risks are insurable, and your insurance needs should be specific to you.
Avoid making decisions based on hearsay or gossip or what your friend bought. Discuss your risks and needs with an insurance adviser – this should be a competent, skilled, and licenced person – either an insurance company, or insurance broker or an insurance agent.
Even then, it is wise to compare policy benefits against premiums of several insurers.
As of December 2022, there were 32 insurance companies, 89 insurance brokers, and 910 insurance agents with thousands of professionals scattered across the country.
These will willingly advise and assist you in identifying the right insurance policy that matches your needs, thus you may choose the policy that meets your needs at the affordable costs.
A cover that is relevant for you, based on your risk assessment, priority, and advice. Where possible, try to avoid instances of buying more insurance that you need.
But don’t buy less. Remember – the most significant benefit of insurance is the protection of your family and assets, which result in peace of mind – plus other several benefits: i.e., savings, financial security, investment vehicles and tax management mechanisms.
Remember, your health is your wealth, as the saying goes --sickness strikes without notice; therefore, take charge of your health and consider buying medical insurance cover. But also, accidents occur anytime and anywhere - consider buying a personal accident cover against disabilities and deaths resulting from accidents..
