When we talk about insurance, many will start thinking about death, accidents, fire and so forth, and well, we have more to think about Insurance that is beyond our imagination. In this case, let us weigh on the crucial pros (advantages) and cons (disadvantages) of insurance 2021.
For starters, What is insurance?
Insurance has been defined in various ways for instance, insurance is believed to be an arrangement by which a company or the state undertakes to provide a guarantee of compensation for specified loss, damage, illness or death in return for payment of a specific premium.
Mores so, on the other hand, insurance has been defined as means of protection from financial loss.
Basically, it is a form of risk management and here are some advantages and disadvantages of
getting insurance; Here are the advantages (pros) of insurance.
Insurance changes who bears the cost of losses and damages. Unlike how it was traditionally,
with insurance, the bearer of the loss burden shifts from the owner of the property to the
insurance company thanks to the money you have been paying for a particular insurance.
Secondly on the list is, , insurance helps prepare for catastrophes. Usually, insurance is made in preparation for a coming danger therefore it helps you prepare ahead of time and in case you incur in
losses, you can be sure they will be taken care of.
Risks are shared in between the owner of the property and the insurer. Whatever risk may
befall whatever you have insured, it will be shared in between the owner of the property and
the insurer instead of having to shoulder the entire burden of risk on your own.
Through insurance, your chances of dependency are eliminated. Dependency on other people
shall be eliminated especially for life insurance since you will leave a certain sum of money for
your loved ones which will help them survive even when you are no more and have left them
behind.
By insuring, you can maintain a standard of living. Even when you are exposed to a situation
when you lose something, you can always maintain your standard of living since the insurance
company shall come in to help cater for your loss.
However, insurance also comes in with some disadvantages (cons) which you my incur and these
include;
The process is bureaucratic. After paying your insurance, the process of getting paid maybe
lengthy as you will need a police statement indicating your loss or a death certificate in case it is
a life insurance. Hence the process of acquiring your compensation maybe lengthier than
normal.
Insurance companies have come along with fraud agencies. Since many insurance companies
have come up, so have the fraud agencies. In order to keep yourself from being a victim of
fraudulent, it would be important to run a background check of the insurance company you
are working for.
Having an insurance can be expensive. Insurance usually required monthly payment hence I
case someone does not have a stable source of income, insurance maybe too costly for them to
keep up with and therefore, it will end up being expensive for some people.
In most cases, insurance comes along with terms and conditions. In a situation where your loss
doesn’t match the terms and conditions that were set in your agreement, there chances you
will incur a loss that the insurance company can’t come in to help resolve your situation.
Therefore, while embracing endurance it is important to watch out for the company with which
you are insuring and also avoid getting into a situation where you are most likely to miss out so
as to attain the maximum benefits of insurance.
As we wind up on the pros (advantages) and cons (disadvantages) of insurance, we guess you now know what to do when it comes to insurance as stressed above.
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