CuVantis Education Series
Why do I need insurance?
Insurance is a way to manage the unexpected risks in our lives. No one ever plans to get sick, be in a car accident or even be sued, but things happen. Without a way to manage those risks, you could be forced to forfeit everything you own to pay the costs associated with an unexpected risk.
Are there other ways to manage risk?
Yes, but few are very practical for most of us. You can choose to avoid or reduce certain risks by (for example) choosing not to drive a car or choosing not to smoke. But these actions will not guarantee you won’t be in a car accident (as either a pedestrian or passenger) or develop lung cancer. If you are wealthy enough to pay the expenses that these and other risks carry, then you can also simply assume the liability to pay those bills should the need arise. But since most of us cannot either avoid or afford to absorb the expenses associated with all the various risks we face in everyday life, insurance allows us to transfer the financial responsibilities of those risks to a 3rd party – namely the insurance company. The fifth option – ignoring the risk – is what typically leads to financial disaster.
How does insurance work?
Insurance works on the “pooled risk” principle in that these risks are likely to happen to some of us, but not all of us. With each of us contributing a little bit through our premium payments, we can all be assured we will not be financially wiped out should that loss happen to us.
What kinds of insurance do I need?
Not everyone is exposed to the same risks, but insurance is typically used to cover:
Health – due to risk of illness or injury.
Life – to financially protect loved ones in the event of our premature death.
Disability – to replace our income should we become physically unable to work.
Property and Casualty – to protect against the loss of physical possessions such as our cars or homes.
Liability – to protect against losses due to our possible negligence resulting in harm to others.
Long Term Care – to provide living assistance when we or a loved one are no longer able to care for ourselves.
For help determining how much Life Insurance, Disability Insurance, or Long-Term Care Insurance you should carry, please check out our insurance calculators here, or complete the form below to schedule an appointment with one of our advisors. For other types of insurance please consult a qualified agent.
The information presented here is for educational purposes only and should not be considered financial, tax or investment advice. Please consult a qualified professional.