The Purpose of Insurance - A Mini GuideInsurance is a necessary part of our lives. Some such as life insurance we are forced to obtain while we have a choice about whether to acquire others such as life and health insurance. Regardless of whether we are required to have insurance or not, it is considered in our own interest to have insurance coverage. A good question to ask here is... Why do we need insurance for auto / car, health, medical, travel, dental or home? The answer is quite simple; life has risks associated with it. Insurance can help us get through some of those rough spots. It can also ensure that our loved ones have a form of safety net when things go awry. Let's think about the following couple of cases. If you happen to be in a car accident and your car is damaged or you damage another person's car the liability is yours. The same will hold true if your home becomes damaged or you suddenly become ill and have to be hospitalized. In all of the situations above you were directly or indirectly exposed to a risk. To live strategically requires that you examine your life and the situations you find yourself in to see where you may be exposed to risks. Whenever you find a risk ask yourself, if I were to suddenly experience this event how would it adversely affect my life and those I love? When you have thought about it and possibly quantify its impact on your life you'll get an idea of whether you should insure yourself against a particular risk or simply take your chances. Insurance is about protection against risk. An insurance plan should be a part of your life strategy. Wouldn't you be disappointed to suddenly realize you lost a major asset such as your home simply because you weren't properly covered. Of course, you would. What should you do then? Examine your life to become aware of the risk you are exposed to then protect yourself and family against them before its too late. Now lets move on to what you should do after you've examined your life and situation and discovered your insurable risks. NEXT The types of insurance available to you
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