My grandmother who is 87 years old often speaks of a world very different than ours when she was a child. Everybody was safe and secure, nobody gave a second thought to locking their doors and insurance was unheard of. In present times insurance has become a necessary evil. The cost of living has increased dramatically, unemployment is very high as well as the crime rate.
Insurance has come to be that security blanket for many people. With insurance we know that if anything goes wrong, we can be assured that the money will be there to help us with payments of the damages or replacements that might occur as a result of damage or theft. In this article we will be looking at what insurance is, and what it can offer us.
What is insurance?
An online encyclopedia describes insurance as a type of risk management used to hedge against the risk of uncertain loss. Simply put, insurance is the transfer of the risk of loss from you to an insurer at a fee called a premium. This premium is calculated by the insurance company based on certain risk factors. For example with life insurance your premiums will be higher if you are a smoker because you are a greater risk.
There is a myriad of insurance on the market ranging from; household to car insurance, business to travel insurance and the strangest of all body part insurance ( surely created by Hollywood stars to insure their most prized possessions).
What can insurance offer you?
If you own a home, a car or other valuable items, you can feel secure knowing that if something should ever happen to your possessions you won't have the financial burden of having to pay large sums of money to replace it. And what about your most valuable assets, your life or the lives of your loved ones? While no amount of money can replace someone you love, life insurance gives you piece of mind knowing that if something should happen to you, they will be taken care of.
Your car is one of your most valuable assets with the highest risk factor unless you hardly drive it. If you should be in accident even small damages cost a lot of money to repair. Car insurance allows you to be able to pay for those damages as well as any other damages to another person's property. Car insurance is a must for anyone who drive frequently.
Household insurance as stated before ensures that if your house should be burgled or damaged in anyway, you do not have to fork out large sums of money to replace valuable items. Depending on the type of policy you will have to pay a certain amount called excess depending on your policy agreements.
There are other kinds of essential insurances such as life insurance and health insurance. They cover your most precious assets of all, your life and the lives of the ones you love. In the event of your death the insurance company will pay a lump sum amount to a beneficiary chosen by you. Health insurance helps cover the cost of expensive medical care should you ever be seriously ill or need to be hospitalized.
Nobody can ever replace items that have sentimental value or the lives of our loved ones once gone, but insurance can ease the financial burden that comes with loss in any form.
Author Resource:
For the best life insurance in South Africa visit http://www.hollardlifeinsurance.co.za .
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