It is considered to be almost a fact that there comes a point in every person’s life where they question the value of, either insurance in general, or a specific type of insurance. Now, if life was a movie or a television series, this would be the point when some kind of disaster takes place to show the characters how important insurance is. However, life is not a television show; but, while we don’t have major life-changing events available on demand, we have articles that logically tackle the question. This is one of those articles where we’ll try to help you understand whether or not you should be paying for insurance.
There are certain points that you need to consider before buying, upgrading or cancelling your insurance package that will help you determine how valuable insurance is.
1. The reason why you need insurance
Surprisingly, most people don’t really consider why they are purchasing insurance packages. In our culture, insurance has become a default thing that you purchase; it’s become an automatic thing; mature people have life insurance. This, of course, doesn’t mean that you should not buy a package for the sake of standing out; that’s not the point.
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The point is that you should understand why do you need insurance; this will help you make the right choices when picking out a package. It may even help you realize that you don’t really need a certain type of insurance that much. For example, some people who happen to work dangerous jobs need an inclusive insurance package.
On the contrary, someone who works a desk job wouldn’t need such an inclusive package. Moreover, if you have a piece of junk for a car, there’s no real reason to insure your car; on the other hand, if your beloved car goes through an accident, or gets stolen, your insurance will guarantee you a replacement, or a reimbursement that will help you out.
2. The ratio of costs to benefits
A smart and rational way to determine how much you need something is a simple cost-benefit analysis. If something costs you more than it offers in return, it is not worth the money, time, or effort spent on it. If, however, the returns are more, or equal to what you’re paying, then it is considered worthy. Keep this in mind as we apply it to insurance costs.
First of all, what are you insuring? You should have an answer to that question by now; it should be a thing that you use often, or something expensive, or something that would cost a lot to repair. Which brings us to the second point; you also need to determine how much the insured item costs. For example, you wouldn’t buy insurance for a phone right? The package would probably cost you more than the phone itself.
Another thing is that you should know how much will your insurance payout; it depends on the company, and the extent of their coverage so, you will have to make a couple of calls to get to useful information. Some companies may end up paying you a relatively small amount of money that might not cover the amount you would pay to deal with any sort of damage happening to your property. That leads us to our third point, how much does it cost to insure that thing?
Insurance premiums are a huge deal. Things that are more prone to damage usually cost more to insure than other items less subject to risk. This is actually why most experts suggest you eliminate any unnecessary risks. When looking at life insurance options, Ty Stewart from Simple Life Insure advises cutting out smoking and drinking, which will significantly lower your premium.
To expand on that, insurance loses its value if you have to pay a high insurance premium on something that doesn’t cost a lot, or that wouldn’t put a dent in your wallet in case you need to repair it.
To get the most out of your package, you need to make sure that you insure something valuable, for a price that is, either less, or equal to its original value. In doing so, you will find that insurance is, indeed, worth the trouble.
3. Your peace of mind
One of the major benefits of insuring your property is that you don’t have to worry a lot about the future; if your house goes down in flames, there is no doubt you would be devastated. The presence of some sort of financial coverage would come in handy, it would take some of the weight off of your shoulders.
The lack of coverage, nonetheless, means that you would have to face the whole weight of the calamity you might go through. The mental and emotional burdens, as well as, the financial consequences. Yet, it would also mean that you wouldn’t have to pay for yearly, or monthly, coverage costs.
Again, it all goes back to your financial state. For some, it may be better for them financially to not purchase coverage; it might be smarter to just be careful instead. There are also others who don’t really mind not having a financial safety net so, for them, insurance isn’t really worth that much.
In contrast, there are other people who would be much better off with insurance; they might prefer the peace of mind to save money. Others may be more prudent or more concerned with the future that they choose to always be covered.
As we mentioned before, we understand it isn’t really easy to make a decision when it comes to acquiring insurance coverage. But, taking all that has been said into consideration, it seems that in most cases, insurance is definitely worth purchasing; even if it means going through some minor troubles. Life is unpredictable, and as cliché as it sounds, it still is a true statement. This being said, it never hurts to be prepared for something. After all, no one is better off sorry than safe.