Many people put a lot of effort in building a strong financial background to secure their future. As much as possible, they do our best in mitigating financial risks from different events that could lead them to a financial ruin. Some of the ways that they’re doing it is by saving money in their banks, developing a good budget plan, and investing in a couple of insurance plans. However, people tend to overlook and fear insurance without having a clear idea on what it actually does. The reality is, insurance plans can help people safeguard, invest, and potentially secure their future.
What are insurances?
Simply put, insurance is an agreement or contract that can be used as protection from financial loss. It helps an individual pay for damages to an asset or pay others when they injure someone or damage their property. Insurance also transfers the risk of financial loss from an individual or business to an insurance company. To make this possible, an insurance company collects small amounts of money from its clients and pools that money together to pay for losses.
Different types of Insurances
Many insurance companies today offer different insurance plans. While purchasing a lot of different insurance plans sounds appealing, investing in one or too many insurance can potentially leave you financially vulnerable. To help you determine the insurance plan fits you the best, we’ve listed the most basic types of insurances that you should know about.
- Life Insurance
Life insurance is a contract that keeps your family or other beneficiaries financially stable when you pass away. This policy can cover your burial service costs and accommodate those you abandon. The policyholder pays the institution in a specific amount of time and guarantees payment of a death benefit. Depending on what type of insurance you have the benefits can go to either you, your family, your parents or the beneficiary you picked.
Do you need life insurance?
Life insurance is commonly used by people who have a family. Once you pass away, it is important that you still take care of your loved ones by leaving them a certain amount of money they can live with.
- Health Insurance
Health insurance plans can take care of the high costs of your healthcare needs, from medical checkups to medical procedures. This can also cover illnesses and injuries. Health insurance plans can cater to your needs depending on what plan you pick.
Do you need health insurance?
The benefits of paying the premium for a health insurance plan will come in handy in the event that you get injured or become gravely ill. Investing in a health insurance plan will certainly save you from financial risks with your medical concerns. This is best used by the elderly and people with constant medical problems.
- Car Insurance
Car insurance helps you cover damages to your vehicle such as fixes and repairs in case you get caught in an accident. This also covers incidents of stolen cars. There are numerous types of car insurance plans, but in some cases, depending on where you live, there will be certain prerequisites or specific car insurance that you will need to follow. Depending on your vehicle, you will also have to choose a specific coverage limit for your plan.
The different types of car insurance are:
- Personal Injury Protection: In the event of an accident, this type of insurance will cover your and your passengers’ medical expenses.
- Collision: This type of insurance will cover any damages to your car if you ever get into an accident.
Do you need car insurance?
Yes, you do! In most countries, car insurance is required by law. In the Philippines, you are required to have the compulsory Third Party Liability (CTPL) insurance. If you are planning to get your first car, make sure you have car insurance before you start driving on public roads.
- Home Insurance
Home insurance covers your home against harm and burglary, as well as different hazards such as incidents where someone gets injured on your property. Additionally, it protects damages to any part of your house, such as the roof, walls, dividers, and your personal properties. In most cases, you will have to pay additional costs to cover damages caused by natural disasters such as earthquakes, flooding, and wildfires.
Do you need home insurance?
You’ll definitely need it if you are a homeowner. Home insurance is important considering that property in many cases is a big asset to most people. Not only can insurance companies cover damages made to your home, but also secure the vast majority of your personal belongings and valuables as well.
Tips for making the most out of your insurance
- First and foremost , start finding the best plan for you. Factors such as your age and lifestyle are crucial components in determining what type of insurance fits you. When purchasing an insurance plan, you must understand the specifics of its entire coverage and make sure it’s worth the price. You can then look over your budget and see which insurance plan is the most practical for your situation.
- Start young. Purchasing an insurance plan, especially a life insurance plan, at a young age can be very beneficial as you are qualified to apply for lower premiums. You will have to pay less compared to getting an insurance plan when you get older. In the event that you have children, life insurance plans can also help you accomplish their education expenses.
Upon reading the basics, you now have a general pool of knowledge of insurance plans that you can further look into. By learning all these things thoroughly, you’ll also have a stress free relationship with financing in the future. Insurance plans are a huge investment, and it’s undoubtedly a big decision. There are numerous insurance companies out there who understand that and are willing to help you every step of the way. In any case, you must remember to be thorough, patient and smart in purchasing your desired insurance plans.