Individuals, families and businesses are exposed to different types and levels of risks. These includes risk of losses of life, health, property, etc. While it is not always possible to prevent unforeseeable events from occurring, insurance is like a promise that when all these risks manifest, your insurer will compensate you. Many people have questioned the value of insurance because it is an intangible product. Here are four reasons why insurance is important:
- Some Insurance policies are mandatory.
In some cases, insurance is the law. A great example of this is third party only insurance. This is a mandatory cover in Kenya and most countries. It helps protect other people, vehicles and property in the event of an accident that was considered to be your fault. Workers Injury Benefits Act (WIBA) Insurance is also a legal requirement for every employer in Kenya to have for the safety and health compensation plan for their employees.
- Peace of mind.
None of us know what will happen next. Unforeseen tragedies such as motor accidents, illness, injury or permanent disability, even death can leave you or/and your family facing immense emotional stress, or even grief. With insurance in place, you or your family will be offered financial assistance in the event a risk manifests itself to allow you to move forward without any challenges. Therefore, you will be able to have peace of mind knowing yours and your family’s financial security has been taken care of by insurance.
- Insurance Ensures Stability.
Insurance is a safety net for when risks manifest. In case of a loss or accident, insurance will put you back to the same financial position you were in before the risk happened only if you have an active insurance policy. Life insurance can support the life of a family, in case you die. It’s similar for a business. Business interruption insurance and insurance on business property will ensure that the business can carry on in case of in case a major equipment is destroyed or if you have to close down temporarily due to various circumstances.
- Insurance shoulders your financial burden.
Insurance enables you to transfer your risks to an insurer. No matter how much you are earning or how much you have saved, sickness or accidents can cause a major dent to your financial position. Covering yourself, your family, and your assets with insurance you are able to lessen the financial burden you have to shoulder when an unforeseen circumstance happens. Insurance is something most people don’t want to think about. But it is a must have.
