What Is Insurance?

By: Jaime Jones

The Encarta World English Dictionary defines insurance as this: “a briefing by which a firm provides purchasers financial security against loss or harm #such as# theft or illness in return for payment premium.” But this leaves many unanswered questions. Is insurance required by law? What #types of# insurance do #I need#? #What is# a payment premium? Am I eligible for insurance?

Let’s start #from the# beginning. Insurance #is needed# #for the# ‘what ifs’ in life. #What if# my family was injured #in a# car accident? #What if# my grandpa got cancer? #What if# I died unexpectedly? Insurance is there #to provide# financial help to those #affected by# the ‘#what if#’ situations. Policyholders pay #a set# amount #each month#, #and when# needed, an insurance company provides them with #the appropriate# amount.

#There are# #many different types# of insurance - auto, health, and life insurance #are just# a few. Not each #of these# is required, but all are recommended. #In the# United States, liability auto insurance is required by law in most states. This covers you against costs incurred by damage and injury to #the other# party #if the# accident was your fault. Check the laws #in your area# #for more# information. #According to# #the new# healthcare reform, all U.S. residents #will be# required #to have# #health insurance# #in the# future. This new law promises #to allow# anyone to #get the# medical coverage #they need#, despite any pre-existing conditions. Before, health #insurance companies# could deny coverage to #those who# had a history of medical issues #because it# was too expensive #for the# company. Life insurance is optional, but #it is# critical #in many# situations. #For those who# lose a loved one, life insurance provides stability #for those# left behind. After death expenses are increasing every year. #According to# FuneralPlan.com, #the average# funeral and burial #is nearly# $7,000. #If you# aren’t prepared for that, how will you lay #your loved one# to rest?

As #you can# see, #there are many# options on how #to protect# #you and your# family #from the# unexpected. While living on #the edge of# your seat and being uninsured #may be# #less expensive#, remember the ‘#what if#’ situations and #the consequences# for #you and your# loved ones.

Article Source: http://yourfinance.co.za

About The Author
Jaime Jones is a journalist for American Income Life Insurance Company. Take a look at one of our State General Agents video websites at www.youtube.com/watch?v=49HNng5Zu1s We are now hiring!