Demystifying Insurance Myths: A Guide on your Insurance needs
People tend to think insurance is complicated, with a lot of jargon that can be confusing, especially if you want to take advantage of it. A lot of people are misinformed about insurance; the reason for this misunderstanding is mostly from how it is sold and the complexity of how insurance works.
Some people associate it with that insurance agent who tries to convince you to buy insurance but then comes up with rules that ensure you don’t benefit from that insurance. He gives you an umbrella but when it starts raining he takes it away.
In this article, I will unpack and make it simple to understand for anyone interested in insurance.
What is Insurance:
In its most basic form, an insurance policy is a contract between an insurance company and an individual or entity to protect or pay for financial losses resulting from unexpected events. Insurance companies collect funds from many people to compensate those unfortunate enough to suffer unexpected events.
In most countries, insurance is an unsought product. That means you don’t go looking for it, the insurance agents look for you and convince you to buy insurance. There are times you buy just to get rid of them. Contact me if you need a reliable insurance advisors
However, more recently, there is more information about insurance benefits, which has made people more aware of the importance of insurance.
People now negotiate their employment contracts to include medical insurance or group life insurance covers. The wealthy people know the importance of insurance while managing risk and protecting their investments.
Insurance MythsIt is common to hear myths about anything that is considered complex. The following are some common myths about insurance.
Insurance is an investment: You should never take up insurance so that you can gain from it because that is not the purpose of insurance. You will not make a profit from your premiums.
Once you understand the purpose of Insurance is to protect or reinstate you after a loss, then you will never expect it to be an investment or a get rich scheme or a product that you will make you rich.
Sometimes the insurance company uses the money you paid for your insurance to invest and gain returns. When they make good returns they may give individuals incentives or bonuses, however, this is not usually guaranteed.
Insurance will improve your situation: Insurance reinstates you or your loved ones to the same state they were before the insured risk happens. For example, if you take up motor insurance and get into an accident, the insurance company repairs the car to be how it was before the accident or gives you money to buy a similar car, not a better one.
Insurance rules are punitive; The rules protect the people who have bought insurance by only paying the right people in the right situations. For example, some investigators determined that you don’t take insurance to take advantage of it, which means it will not cover a risk that is expected.
If you take up medical insurance when you are expecting a baby, you will not be covered for maternity because this is a foreseen risk.
Insurance is a fraud: This misunderstanding also comes from poor sales. If your insurance advisor provides you with wrong information or you misunderstand the purpose or reason for taking insurance you will feel like it is a fraud since it will not work as you expected.
Nonetheless, there is a lot of fraud in insurance with many people trying to gain from the funds collected from others.
Insurance agents are Conmen: Insurance is not complicated or rocket science, it’s quite simple if you know what you are looking for. Many people get confused and prefer if their insurance advisors can guide them on which product to take.
Your advisor should understand your need and explain it in a way you understand before you take it up. However, these agents are under pressure to make the sale and meet their target since insurance is sold on commission.
That is why it’s important to choose your insurance advisor wisely. Contact me if you need a reliable insurance advisor.
What insurance cover do you need?
Like any good or service, proper information and analysis of your needs will ensure that you take upthe best insurance product that solves your insurance need.
If you have investments and property, insurance protects you from losing it in the event of a situation or risks like illness, accidents, fire, theft, death, property damage, and other perils.
This is insurance against a life. It protects you or your dependents from financial loss in case of your demise.
If you have a spouse, children, aging parents, or relatives who depend on you, they will lose the financial support you give them when you die, however with Life insurance they will have a jump-start in their life without you.
A life insurance policy will ensure you leave a legacy to your loved ones, that they are not destitute but they can transition and continue life as it were.
General insurance covers
General Insurance protects you from losing your investment due to unforeseen events. It caters to your motor, medical, property, home, business, and liability risks.
What do you own that you value or have invested a lot of money on? This can be a car, house, business, even the clothes in your closet, watches, shoes everybody has something they value.
Imagine losing this valuable thing due to circumstances beyond your control like theft, fire, flooding, or accident. How far will this even set you back? Insurance will bridge the gap for you.
Liability Insurance Covers protect you from the cost of lawsuits. For example, you can be sued by your employee if they got injured while working. For this, you can take a WIBA (working injury benefit act) that covers your company in case your employee got injured while working and wins the suit.
Other liability covers are for professional indemnity which will protect you from malpractice lawsuits in whichever profession you may be in.
You can find other insurance options and quote to start you on your way to your insurance solutions.
Insurance is a necessary product to ensure you don’t go into financial ruin due to a single or a series of incidents. However, you have to choose the right insurance product that covers your risk and how it covers you.
It’s important to choose your insurance advisor properly. because he/she will determine if you get the important information you need to know when buying the product and not when the unfortunate event happens. With the right information in the market, you will be able to get value for money.
Would you like a free quote for you or your business in medical, life, Professional Indemnity, home, or motor insurance? Contact me