Insurance is a contract which helps you protect yourself against the risks that might have an unfavorable impact on your life. If you have insurance, it means you’re financially protected and in the case of any losses that you may suffer, your insurance company will try its best to mitigate them. It shelters you if any of your possessions gets damaged by reimbursing for your losses or in case you die, it promises to reimburse your family.
Personal and Business Insurance
Everyone needs some kind of assurance, with the help of which they have the nerve to take risks. Insurance is basically assuring that someone is there to help you in your times of need or any accident. Just like a human needs insurance in their life, a business also needs insurance.
Businesses have different kinds of insurance policies. Damages and mishaps are inevitable and a backup plan is always needed, especially, for emerging businesses as their place in the market is very risky and they cannot bear early losses which might ruin their reputation. Hence, all firms need to be insured by some company. In the case of any unfavorable debt conditions, these companies also provide debt settlement leads and protect your reputation.
Before getting insurance, it is required for the client to understand all the concepts and components of insurance policies. Two important components of insurance are premium and deductible.
Premium is basically the amount of money you pay to your insurance company, monthly or yearly, to buy insurance. The amount that you pay depends on the risk or value of the possession you wish to insure. For example, if your car is an expensive one, its insurance would cost more because damage repair is expensive.
Deductible is the fixed amount of money which is kept by your insurance company to utilize in the case of losses. Deductibles help keep premiums affordable and phase out small claims. For example, if your deductible payment is $300 and you face a loss of $1000, the insurance company will pay the rest of the $600 for the loss. However, if the damage repair costs $100, you don’t get to keep the rest of the money as it is a fixed payment to the company.
When Do You Need Insurance?
Some insurance is stated compulsory by the law. For example, you need to have auto insurance to get a driver’s license and you need to have building insurance to get a mortgage on your house. Apart from compulsory insurance, some insurances are availed to protect yourself and your family. If you have a family that relies on you, you must have insurance to protect them after your death. Or if you wish to travel abroad, you need to have insurance to help pay your hospital bills in case you get sick.
So, whether you’re a graduating college student or a retiring senior, you need an insurance plan.