Why Do I Need Insurance?

One of the most common questions advisers can ask is "Why Do I Need Insurance?"

Textbook answers aside, let's all face it. There are uncertainties in life.

We would all love to be able to own our dream home, dream car, go for as many holidays as we like and do all the things we would like to do. However, this often rests on the some critical assumptions:

1) You have a lot of spare cash or

2) You are able and working to provide for your family and yourself.

For most people, option 1 comes about from investment gains and savings which will still bring one back to option 2. Lottery gains aside, many of the things we want need money which is often obtained by working for it. Thus, many things are possible when you are able.

Let's make some changes to that assumption.

Let's just say one day on dream holiday trip, you, a successful sales executive, meet with a major accident that renders you unable to move around freely to continue with the career that you have spent huge amount of time and money investing into to build up. The following questions will likely occur:

Am I able to pay for the hospital bills that have resulted from the surgeries and hospital stays?

With my loss of freedom of movement, will I be able to work to ensure I still have income?

If I can't continue in the same job, will I be able to find employment that ensures the same amount of income that I currently enjoy?

Do I or my family have enough money to pay for our daily needs and children's education fees from now on?

Will I be requiring professional medical care as well as long term nursing assistance which will translate into long term medical bills?

In the event an unforseen illness or accident should occur, it is often not just the immediate cash needs one need to worry about. It is often the long term financial requirements, impact and loss of income that one needs to consider about as well.

Unlikely? Think again.

A recent case I heard of was a successful self employed designer who suffered a stroke attack in his early 30s. This rendered him unable to continue with his business. Early thyroid problems had prevented him from being insured. This meant the savings he had from his business which is now defunct were all wiped out due to treatment requirements. He is currently looking for secondary employment which would likely not be able to pay him his previous salary and his future income would look very uncertain as well.

It would be advisable for one to speak with a qualified adviser who would be able to advise on how one can best provide for life's uncertainties and how the wide universe of insurance products can be best used for one's benefit.