Protecting Your Assets: Why You Need Insurance

One of the more worrying issues related to your money is how to protect your assets. During time so economic recession and market turmoil, we tend to pull back a little bit and consider how to best protect our money and remain financially solvent. One way that you can protect your assets is to make sure that you have adequate insurance coverage.

How Does Insurance Help You?

When we think of insurance, many of us think of unscrupulous salespeople, roping us into policies we don’t need. The truth, though, is that there are insurance policies that we do need. When you purchase insurance, you are spreading out some of your risk. You pay a smaller amount every month, or every six months, and in return, if you should need a large amount of money to pay for large expenses, you receive it.

Few of us can come up with $12,000 to fix the roof if a tree falls on it, or $25,000 for a hospital stay. Those kinds of expenses could easily financially devastate most people. Insurance purchases protection. You may not ever use it, but it’s there if you end up needing to cover some big costs.

Understanding What’s Covered

All of this works well in theory, but what about in real life? Many people have horror stories of claim denial. Essentially, you could be paying your premiums, and then not get the promised benefit should you end up in trouble. Before you decide on any insurance policy, you need to do your homework. Know what you need, and understand what the policy covers.

You should also purchase insurance from a reputable company, or from a properly licensed agent. You can check into the history of the insurance provider, and the insurance agent/broker to make sure that you are dealing with someone fairly trustworthy. Also, ask questions and get clarifications. Don’t sign anything unless you understand the contents. (This is good advice for just about any agreement.)

Take the time to compare your options as well. Compare similar policies to see if you can get a better deal. Make sure you are truly comparing apples to apples when you make your decision. You should compare policies with simliar coverage amounts and items covered. Realize, though, any gap in price that is too big could be a red flag. Savings that seem extreme might be too good to be true.

In the end, it’s up to you to make sure that you are properly covered, and that you understand what’s entailed.

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