As we said at the start, most people think insurance is an unnecessary expense. The reason is that we feel confident about our future and our ability to tackle unseen circumstances. But there is a huge difference between our perceived ability and reality. For instance, a few years of savings can vanish in case of a medical emergency. That’s just one example.
Here are 3 reasons why getting insurance is important
#1: Insurance ensures family’s financial stability
No matter how much you have managed to save or what your monthly income is, an unexpected event can burn a huge hole in your pocket or can simply jeopardize your family’s financial future.
For example, if you do not have adequate life insurance, your family might have to go through financial hardship if you were to meet with an untimely death. Though no amount of money can replace the loss of loved ones, having life insurance would save them from going through financial hardship. Meanwhile, if you or your family do not have enough health insurance, then huge medical bills during any treatment can completely shake your finances.
So it is essential that you cover yourself, your family with an adequate amount of insurance.
#2: Insurance brings peace of mind
The premium you pay to the insurance company is the price that guarantees that the insurance company will cover the damage in case of an unforeseen event. And, that guarantee that your risk is covered brings peace of mind.
For example, let’s suppose you die an untimely death at a time when you still have several milestones to achieve like children’s education, their marriage, a retirement corpus for your spouse etc. Also there is a debt as a housing loan. Your untimely demise can put your family in a hand to mouth situation. But, if you would have bought term insurance considering all these factors, your family would be able to sail through during the hard times.
#3: Insurance reduces stress during difficult times
No matter how hard you try to make your life better, an unforeseen event can completely turn things upside down, leaving you physically, emotionally and financially strained. Having adequate insurance helps in the sense that at least you don’t have to think about money during such a hard time, and can focus on recovery.
For example, suppose you or someone in your family had a heart attack and needs immediate hospitalization. Such treatments at good hospitals can cost lakhs. So having health insurance in this case, saves you the worries and stress of arranging money. With insurance in place, any financial stress will be taken care of, and you can focus on your recovery.
Bottom Line:
Having insurance – life, health, and liability – is an essential part of financial planning. It can save you from financial hardship in case of any unforeseen circumstances. However, the decision to buy insurance should be determined by three factors – requirement, the benefits you get from the policy, and your ability to pay the premium.