How Getting Insured Helps You in Your Finances?

Insurance is meant for everybody. However, when you are at a certain age, you may not be able to get many benefits from an insurance policy. For example, in my home country kid below 3 months cannot be insured and when you are above 65 years, you cannot insure for a longer duration and you also get fewer benefits.

Getting Financial Coverage For Loss and Damages

Insurance is a way to get financial coverage for almost anything. You can not only insure your life and your property but also your business.

You can insure almost anything. Your animals can be insured. You can insure your pets (cats, dogs, etc.), you can insure your farm animals (cows, chickens, horses, goats, etc.). Animal insurance provides coverage for veterinary bills as well as death. By insuring your animals you can save a lot of money on veterinary bills as well as financial coverage against death.

Insurance companies also provide coverage for the harvest. They will estimate the financial value of your mango fruits (not the tree). You will then have to pay the premium. If you cannot harvest your fruits due to some natural disaster, the insurance company will provide coverage for the estimated price of your fruits.

Is Insurance a Liability?

I know a lot of people who have paid auto insurance for many years and have not benefitted from the insurance as they never encountered accidents. However, just because you had to pay for insurance without any returns does not mean your payment is wasted. Having insurance provides financial security.

Insurance is not a liability. It is true that you will have to continue to pay for insurance even though you may not get any benefits just because no accidents have occurred, but think another way round, what if you get into an accident? YOu can easily recover the financial damages.

If you are scheduled to pay your premium yearly, I think you can manage to pay your insurance premium even if you do not have a regular job. You will have to continue to save from whatever amount you earn in order to pay for the premium. If you have zero income throughout the year, that's another matter. Insurance can become a liability if you are unable to pay premiums in time.

Insurance is Investment, Not a Liability

Insurance is not a liability, it is an investment. Investing means you put money on something in a hope that it will give you profits. You buy an insurance policy and you get financial coverage against your purchase in case something unwanted happens. Isn't this investment (you are getting a return on your investment)?

We use banks for three purposes, to secure our money from theft, to earn interest on deposit, and to get a loan for various purposes. We buy insurance for two purposes, one, to get financial coverage if something bad happens, two, to earn profits on premiums upon the maturity of the insurance policy.

You can earn high interest in your fixed bank deposit (11 percent in my home country) you might earn more if you actually invest in the stock market or mutual funds. For example, you can earn as much as 22 percent on mutual funds investment (that's the percentage return in my home country), but you do not earn this much from your insurance policy if you are getting just an insured amount and bonus. But you might benefit more if you have to make claims for your loss or damages.

You Can Earn Passive Income From Insurance

I know people from my real life who have been making a lot of passive money by working as insurance agents. They have real jobs and they are popular in their workplace. They manage to influence people to buy insurance products from them and earn up to 25 percent commission.

You don’t have to be an insurance broker to earn passive income. You can also earn passively from your insurance policy. For instance, you buy life insurance, pay a premium for many years and finally get the insured amount along with a bonus.

First published on Trendri, in author's name.