Insurance doesn't have to be complicated. In fact, it can be quite simple, and it's a great way to protect your family and assets while gaining financial peace of mind.
A large variety of insurance products are available, and the list includes life, home, automobile, travel, business, group, medical and disability insurance policies. With so many insurance plans to choose from, it's no wonder it can seem complicated. But fear not; we've compiled some useful information that will help make sense of the insurance business.
Insurance is much like a financial safety net. You purchase the product, whether it's life, home, auto or some other type of insurance, in exchange for financial compensation for losses in the event of an unexpected accident or unpredictable incident, as long as the incident is covered by the policy (insurance contract). So basically, depending on your policy, insurance will cover or help cover your costs and protect your financial future.
Per the Insurance Bureau of Canada (IBC), insurance works because payments (premiums) of all the policy holders go into a large pool of funds that is then used to pay the claims of the few who make them. Ample funds are always available, since the amount of money going into the pool exceeds the amount needed to pay claims. For more details on how insurance works and how your insurance money is allocated, consult with an insurance professional, or visit the IBC's website.
In Canada, insurance is mandatory for certain situations, such as with automobile insurance, where a minimum amount of coverage is required just to get your vehicle on the road. In other cases, insurance is not a necessity but an option, such as buying a travel cancellation policy to cover your losses if something unforeseen causes you to cancel your trip. But consider this: If life throws an unexpected and unfortunate incident your way, would you comfortably be able to cope with and recover from the financial losses the incident might cause? If not, then insurance is your best bet to protect yourself and your family from a potentially devastating financial hit.
Can you afford to be without it? Insurance is an important part of your personal risk management, and by shopping around, you will likely find an affordable plan to suit your needs. Insurance companies are vying for your insurance dollars and might be able to offer discounts for things like bundling policies together or by modifying the coverage and deductible (amount of money you pay out of pocket when making a claim) to make a policy more affordable. Insurance is also good for financial literacy, as understanding how your money works will allow you to make informed decisions on how to protect what's most valuable and positively impact your financial future.
How many insurance policies do you have? Let us know in the comment section below!
And you'll see personalized content just for you whenever you click the My Feed .
SheKnows is making some changes!