Insurance is often described as a necessary evil that’s perceived as being required to protect your interests… be that your health, vehicle, home, personal belongings, business or even your ability to make repayments on a loan.
Certain insurances are compulsory, such as auto insurance that you can get from a credible auto insurance provider, whilst some types of insurance just make sense; such as medical insurance particularly when travelling – but it’s important to note that whilst there are many valid reasons to purchase insurance, many insurance products are sold on the basis of fear mongery and you can live without.
This articles looks at a number of different types of insurance with a view to considering whether these insurance products are safety nets we can live without when looking to streamline our financial affairs, or whether they are essential to our peace of mind and financial security. While driving you need to have your insurance ready, in case you get into an accident or some trouble, you might need to look up hardship license requirements.
Insurance, whilst a financial services product, is actually motivated by an emotional trigger based on our innate human desire to avoid suffering. Indeed, this emotional trigger can be very sensitive in some people, so if you’re someone that feels the need to go out and buy every insurance product offered to you – it might be worth first, stepping back and reflecting on the likely return on investment of each policy from a pure financial perspective in order to work out whether that particular type of insurance is a necessary evil or an unnecessary expense!
TRAVEL INSURANCE
If we felt we were going to have an accident whilst on holiday we would most likely end up staying at home.
Unfortunately, medical costs can quickly spiral out of control when travelling. For instance, imagine the cost of having to dispatch a helicopter to rescue you from a remote location; the daily cost of life support; or the expense of a life saving surgery. Indeed, even emergency dental treatment can be exceptionally expensive in some countries.
Your health is your most valuable asset and whilst in some countries such as the UK, they have the safety net of the NHS, or in the US there’s insurance that takes care of the bills – when you’re travelling abroad, many countries will simply not treat you unless you cough up an incredibly large amount of money.
Plus, there’s always the issue of getting home, as many commercial airlines will not transport a sick or injured person back home and you require a specialist medical evacuation flight.
Travel insurance seems to be something a lot of people will take a chance on, as it’s considered an unnecessary expense – yet this is a naive approach – for if you were to ever need to use it, the value of that comparatively cheap travel insurance policy will be phenomenal.
Indeed, the difference between having travel insurance and not could be the difference between life and death. Therefore, out of all the insurance policies to consider taking out, a decent travel insurance policy is most likely the best one.
BUSINESS INSURANCE
There are a number of different types of business insurance available, but one of the most common and wise purchases once can make is that of public indemnity insurance – as this way, you are covered from simple accidents such as slips and falls to more serious accidents arising from product defects or incidents that lead to serious situations.
There are many types of important insurance coverages that you can discuss with a business insurance broker. Some of these coverages include professional liability insurance, often referred to as errors and omissions insurance, will cover a business against negligence claims. An often overlooked aspect is that as many business owners start their business from home, many homeowner’s policies don’t cover home based businesses meaning you might need to include this within your home insurance policy, or take out a seperate policy, in order to ensure you are covered.
GADGET INSURANCE
A surprisingly expensive form of insurance, that is very common today, is gadget insurance.
This is becoming increasingly necessary as we take more and more gadgets everywhere we go, and as these gadgets are so fragile and easy to steal, insurance premiums are understandably high. In addition to high premiums, this particular type of insurance product is known for many insurers trying to wriggle out of honoring claims.
With this in mind, it might be better to just put some money aside as a fund for if and when your mobile device is no longer usable. This can be a much less hassle some way forward, however, the good news is a lot of home insurance policies and even bank accounts provide adequate cover for your gadgets – so check this out before buying a specific policy.
LIFE INSURANCE
Life Insurance is a peculiar concept, as insurers tend to only insure against risks that might happen; rather than risks that definitely will – and it is inevitable at some point we will all die.
Therefore, life insurance is a slightly different kettle of fish. Some view life insurance as being akin to an investment fund that pays out upon death, however, the main benefit of an insurance like this life insurance for mums, is that it covers you in the event of your death irrespective of age; meaning from a purely financial perspective, it can offer a decent return on investment if you were to die prematurely.
IF you are looking for the best life insurance in NZ, then look no further than the experts at ServicePros.
WEIRD AND OBSCURE INSURANCE POLICIES
There are many obscure insurance policies available, to people, that may seem weird at first glance but when you think about it logically it actually makes sense and can be a worthwhile investment; for instance, Bruce Springsteen has insured his vocal chords with Lloyds of London for $6 million. At the end of the day, insurance is all about mitigating risk of loss – and if you have worked hard to develop an asset, you want to ensure you protect it to the highest extent possible.
That said, some types of insurance products verge on paranoia, such as “kidnapping insurance” where an insurance company agrees to reimburse the ransom money if you have been kidnapped – though, whilst it does seem a somewhat paranoid purchase, in hindsight if you were to be kidnapped, you would be looking back and patting yourself on the back.
