Tanggram
2 min readMar 1, 2021

--

What is an insurance

The key role of insurance is to help people financially protect themselves against life’s uncertainties. It is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.

It works by pooling together the resources of a large number of people who have similar risks to make sure that the few people who experience loss are protected.

When you buy an insurance policy, you will pay a monthly or annual premium and this money joins the premiums from other policyholders, it forms a large pool of funds.

Having insurance is important. As we move through life, we get a job, we find our love, we raise our family, we have our baby, or even we start our own business, the importance of insurance in a long-term plan increases. Insurance matters, think about these:

  1. It protects your family from financial failure and maintains a good standard of living. Your loved ones and most important person in your life can be protected when an accident happens even while you are unable to help.
  2. It reduces your and your family’s stress during difficult times. No one knows which comes first, accident or tomorrow. Unforeseen tragedies such as illness, injury or permanent disability, even death — can leave you and your family facing tremendous emotional stress, and even grief. Insurance would reduce financial stress and let you focus on recovery and rebuilding your lives.
  3. You may have a decent financial position today, but unexpected events can cause everything to unravel really quickly. Insurance is secure to help you maintain your good financial condition.
  4. Insurance brings you peace of mind. No amount of money can replace your health and wellbeing, by having insurance, you will not worry about if something happens to you, what your family will suffer.
  5. Insurance can also be a legacy. Life insurance would pay a large amount of lump-sum benefit to secure the financial future of your children and protect their standard of living.

There are many different types of insurance. Such as home insurance, car insurance, business insurance, these insurances are called “General insurance”. Life insurance, trauma insurance, TPD insurance, and other insurances that cover the risks of lives are called “Personal insurance”. In next week’s article, we will discuss these in detail.

--

--

Tanggram

Australia’s first mobile investing app that combines shopping rewards with stable investment options. Invest while shopping.