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September 16, 2018  •   6 minute read

Understanding the Hidden Value of Insurance Products

About Life insurance and how you should make claim to the policy

Understanding the Hidden Value of Insurance Products.

One aspect anyone can never plan for is an accident. Insurance policies help protect you, your loved ones, and even your possessions from these accidents which can result in injury, death, and huge financial losses. These various insurance products have a big job in cushioning you from a blow or something untoward happening.

Thus, it is critical for you to understand how insurance works and comprehend the real value of insurance , so you will always be protected and prepared at all times. There are many providers out there and My Insurance Broker urges you to know what to look for in insurance products, to research thoroughly, and compare first before buying the insurance.

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Defining the Real Purpose of Insurance

Many are familiar with the word insurance, but many don’t truly understand its meaning nor the value of insurance. Various insurance products are offered in the market as a means to protect you, your family, and the things that matter to you. The insurance you buy will, of course, hinges on two factors- what you want to protect and what you can afford.

Some insurance policies are requirements for you to be able to do things. For instance, in Ontario, Canada, it is a legal requirement for all motorists to have an auto insurance policy. Those who are uninsured, face severe penalties. In other areas, you cannot drive a car without third-party liability insurance. You also cannot secure a low down payment mortgage without PMI or private mortgage insurance.

With so many types of policies out there, it can get a bit confusing to choose the right one. My Insurance Broker noted that you have to assess your needs, look at the details of each policy from benefits to limits, and find out what will work best to address those needs. Even if you can actually afford the products, you don’t have to buy them at all if you don’t have a need for them.

Understanding the Different Types of Policies

There are many insurance products out there, which will certainly overwhelm you. My Insurance Broker, who is a leading and trusted professional in the insurance industry, noted that there are three basic types of insurance policies. All of these have different kinds of purposes.

1. Life Insurance Policies

Even under this category, there are many different kinds of products depending on your needs. If you want your dependents to receive financial support in the event of your untimely demise or possible future total permanent disability, you can opt to avail of these insurance products- term life insurance, whole life insurance, dependents’ protection scheme, and home protection scheme.

If you want your life insurance to also be a vehicle for savings and investment, apart from its standard job of protecting your loved ones, then you can consider getting endowment policies or investment like policies like a variable life insurance plan.

You can also avail of a life insurance plan that will provide you more income during retirement such as annuities or pension plans.

When you are paying the premiums of these insurance products, it might be stifling because you don’t feel and see the immediate benefit. But the real value of insurance lies long-term, especially during that dire moment when you are in a crisis because something terrible has happened. This is when your life insurance product will truly shine.

2. Health Insurance Policies

As its name implies, the purpose of your health insurance plan is to pay medical bills due to illness or accidents. There are many different types of insurance products for health that can cover critical illness, disability income, accidents, and the like. To illustrate, My Insurance Broker offers a Flexcare and Follow Me health insurance coverage, which gives you the flexibility that you and your dependents need. There is a wide range of coverage from core drug plans, dental plans, or combination plans. They even allow you to customize your plan for additional protection.

3. General Insurance Policies

These policies protect you and all the assets that you own from properties, vehicles, businesses, and the like. Examples of these insurance policies that My Insurance Broker provides are - car insurance, uber insurance, business insurance, home insurance, travel insurance, and recreational insurance.

Now that you know the different insurance products out there, it is critical to find out how they work.

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How Does Your Insurance Work

Here is a very quick rundown on how your insurance policy will work to protect you.

1. Assess your needs and choose your policy

Determine what want out of the insurance product that you are thinking of getting. Is your purpose only protection or do you want an investment component. Which assets are you considering to protect? Remember, if you can afford insurance for your car and house, you have to allot insurance coverage for your biggest asset YOU. Do your due diligence and research. More importantly, read the fine print of the policy contract to see what is covered and what its limitations are.

2. Pay the Premiums

The insurance premium is the amount you pay to avail of the insurance coverage. It could be paid per month, quarter, or year for a set amount of time. It could also be a one-time payment like for your travel insurance. Generally, it is cheaper to pay annually than to opt for the monthly or quarterly payment scheme.

More significantly, the amount of your premium will depend on the risk and value of the potential loss you are insuring for. The only person who can decide this value is you, and it also based on what you can afford to pay.

For instance, you avail of a life insurance because you want your family to be covered should you suddenly pass away and they lose their main breadwinner. It must be noted that the importance and value of your policy will only be retained if you are updated with all the premiums. If you make a mistake on making a lapse in payment, you risk not getting any claims at all.

3. Making Claims

If something terrible were to happen that is covered by the insurance policy you purchased, then you can make a claim with your insurance provider. You need to report what happened and give supporting documents. They will run an investigation, and if you claim meets what is written in the policy, then they will give you the money.

The Value of Insurance Protection

The world is full of risks and uncertainties. Every single day you, your family, your business, your property, and your assets are exposed to different kinds and levels of risks. It is not always possible to prevent unwanted events and accidents from happening. Thankfully, the financial sector has developed products to help protect you and everything important to you from such losses. Insurance is a financial product that eliminates the burdens that can arise from these risks. Consider these advantages of purchasing an insurance policy:

Ensures Family and Business Stability

nsurance serves a safety net when things go wrong. Life insurance supports the family should the primary income earner be lost. The same holds true for business. If a key member or piece of machinery goes out of order, the business will carry on because of the insurance coverage.

Gives Peace of Mind

Primary income earners can sleep well at night knowing that their loved ones are secure. In the same token, businesses have peace of mind because they can easily shift the risk, which the insurance covers.

Keeps Commerce Moving

Insurance is able to help businesses minimize risks and protect their employees. Insurance policies help businesses run successfully. This translates to more employment, more products and goods sold, and more economic activity.

Assures Lenders

Lenders require proof of insurance. If mortgage lenders want PMI before letting you buy your house, business lenders need you to present business insurance before they lend you the funding to keep your business ideas going.

Complies with the Law

In some states, you cannot operate a business without insurance. The same holds true for owning and driving a car. Some dangerous professions are required to get life insurance.

Protects the Small Players

Insurance protects the small players in the industry which is a preventive measure to keep monopolies from running the economy. Usually, when downturns happen, the big players can fend for and take care of themselves. They can take the hits and losses. The same is not true for the small players, so they rely on insurance to mitigate risks. With this system in place, competition remains robust and everyone gets better pricing and opportunities.

Getting insurance is the right thing to do to protect yourself, your loved ones, and your hard earned assets. Most people don’t want to face the concept of insurance because they think of it as courting disaster. They don’t want to think of their untimely demise.

Do not fall into this trap because this mindset will only hurt you and your loved ones should a freak accident occurs. Insurance is the cushion of protection you need to carry on with life in spite of its blows. Keep yourself, your loved ones, and assets protected by calling My Insurance Broker today because they have a wide range of insurance products to address your needs and concerns.

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