Insurance and Risk: An essential role never to be underestimated
Risk is a part of everyday life. Insurance helps sustain financial security. Yet there is hesitation to avoid thinking about risk and insurance. Discover more.
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Alex Deric
- May 28, 2020
Insurance enables a set of preventive measures to minimize the chances of risk and damage and to deal with financial consequences. Yet people often underestimate this essential need.
People don’t want to think about risk and insurance? Why?
- People think risk and insurance are too complex
Insurance has a reputation for being overly complicated. Often, people get overwhelmed and don’t know what insurance policies exist and what they are intended for. Even if they decide what policy to buy, they often don’t know how much coverage they really need. Then, there’s the insurance process that is often too complicated and downright outdated with so much paperwork and legal jargon. It is understandable that people are not confident with their policies and often assume coverages are just interchangeable. - There’s a level of mistrust
Historically, the insurance industry wasn’t known for having a reputable level of consumers’ trust. From being overly-complicated to skepticism of a hard to understand process, it’s hardly surprising that people avoid anything insurance-related. - It’s boring
Most people would rather watch paint dry than deal with insurance. However, the insurance industry is evolving , as there are improved and more methods of communication. - It’s morbid
Understandably, planning for death and tragedy is overwhelming and people often chose not to think about insurance policies that are linked to these adverse events such as life insurance policies or disability income insurance. Though provisions surrounding death is exhausting, managing these essential financial matters is necessary, especially if we have loved ones we want to secure. - People don’t see the value
Often, people don’t see the value in insurance until a significant life event such as marriage or becoming a parent happens. Additionally, it’s hard to see the benefit of buying a policy as it’s a cost with no noticeable or immediate value. For example, life insurance usually benefits other people but not the policy owner. For this reason, most people will struggle to see the value as they don’t benefit directly. Yet when life circumstances change, people become motivated to financially secure their family and start looking for appropriate insurance policies.
Risk and insurance and it's vital role in our lives.
As much as insurance may be complicated and boring, its role is essential in enabling the following:
- Financial security and risk management
Insurance allows you to manage risk by paying a small amount of money as protection against losses that can have a detrimental impact on our lives. Insurance gives you protection and financial security during vulnerable and necessary times. Unforeseen events can wreak havoc with injury, disability, long term illness, or death impacting your income and long-term earning potential. Insurance can help ease financial stress and enable you to focus on other priorities, helping you recover and move forward. - Planning for the future and achieving financial goals
Insurance allows you to set your financial goals for the future and work towards them. It enables you to plan for your retirement and secure a steady flow of income to support your desired lifestyle once you reach a certain age. Insurance is also a convenient savings tool. - A legacy to leave behind
Life insurance policies are a convenient vehicle to leave a tax-efficient inheritance to your loved one (s). Life insurance protects your income and provides for your family in the case of an unexpected death. Life insurance can be an integral part of your overall financial plan and turns highly taxed assets into non-taxed assets, saving you as much as 30% of inherited assets.
Let’s make sure you’re protected. Life is full of risks. To your family. Your assets. Your future. Vero, the only way to accurately identify and evaluate your risks.
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Life is full of risks. To your family. Your assets. Your future. The problem is traditional solutions that propose traditional answers, one policy at a time.
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