What is Insurance All About?
InvestmentTotal.com explained what is insurance all about. You’ve heard insurance many times, but what is the exact meaning and definition of insurance? If you are interested, continue reading this page and get informed about not just the meaning and and definition of insurance but the importance of it as well.
In my own opinion, insurance is an investment. Why? it is because you pay for it (the premiums) and expecting great returns during unexpected events such as accident. But, in finance, insurance might not defined as an investment. For a wise investor, insurance is an investment.
What is an Insurance
Insurance is an income protection. You don’t need to get money from your income once you met an accident or get sicked just to pay the hospital bills or other medicare matters. The insurance company will pay all the expenses occurs during that sad or unexpected events.
Let us first get some definition of the online dictionary and other insurance websites. Feel free to add your thoughts about “what is insurance”, in your own words, explain it using the comment box below.
What is Insurance?
According to Wikipedia – a free online encyclopedia, insurance explained as follows;
“Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange for payment. It is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss.”
Source: Wikipedia Explained Insurance
This simply means, insurance is a one great way to minimize “not just the risk” but the financial losses than could occur from a uncertainty called risks. In business there are risk such as industry or management risk. Just as in life, you travel everywhere – there are risk everywhere. If you want to cope with those risks, buy life insurance. You don’t know the importance of life insurance unless the time came and you realized you really need it.
According to Investopedia – a great source for investing and personal finance. Of course, in personal finance we should also talk “insurance”.
Insurance is a contract (policy) in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.
Source: Insurance Meaning in Investopedia
Just like what Investopedia says, a financial protection. In our example above. Once the insured (the policy holder) died, the beneficiaries will receive a specific amount of money from the insurance company that can be use for financial recovery.
Do I really need life insurance? Of course yes. Not just you, everyone needs life insurance. Here’s what Suze Orman point of view about having a life insurance, this finance expert once said…
“If there is anyone dependent on your income – parents, children, relatives – you need life insurance.” – Suze Orman
Your Turn – What is Insurance
I do hope you’ve learned a lot from this page. Insurance is important, but not everyone knows about it. Now, let me hear about your thoughts and opinions regarding what is insurance all about. Share this information with your friends and neighbors. Thank you.