Insurance….But Why??
Sometimes it feels a lot like buying insurance is throwing money down the drain. You don’t think it’s very likely that your house will burn down or that you will get seriously ill so what is the point in spending all that money insuring against these unlikely events?
Well firstly, it is unlikely that these things could happen but if they do then not having the insurance could be disastrous. When you choose to take out an insurance premium, it is always to mitigate against the worst possible scenario, taking into account the consequences and the likelihood of the event taking place. So, while you might be okay with leaving alien abduction off your insurance policy (almost definitely not going to happen), you might think more carefully about adding an insurance policy for the contents of your house that protects against everything from burglary to fire.
So why should young families, in particular, take out insurance?
You Have a Lot At Stake
Young families have a lot more at stake than say, single people or older couples. This is because you are still building up your assets, working up the career ladder and raising young children too. A set back for you could take a lot longer to resolve without insurance than it might for a person who has years of savings piled up for this very possibility.
Though you might prefer to save the money yourself, this is an instance where spending is the best way to save. You could save the money you would have spent but in the event of a problem, you won’t have nearly as much to cover the cost of the damage.
You May Need More Support
As a young family, you will almost certainly need more support in the event of a crisis. Don’t forget that you are still young and inexperienced in many ways so having an insurance company who can help you when you are most in need is a good back up to have.
However, don’t be lulled by your insurers. While the vast majority are all too happy to help, there are still some dodgy dealers who need a nudge to get what you need. For example, if you were to take out insurance against the possibility of becoming disabled, you may also need help from disability attorneys to get what you deserve – but this is a topic for another time.
You Could Save More While You Are Young
Some insurance policies like life insurance are actually a lot cheaper to take out while you are still young and fit than later on in life. From the insurer’s point of view, the younger you are, the less likely you are to die within the 30 year time frame (or whatever time frame they set). This means that it is very likely that they will just acquire profit from your premium.
Though reading that might sound like a waste, think about it this way: you are basically betting that you don’t die and paying the insurer and not dying is an excellent turn of luck. On the other hand, if you do die, you will leave your family with enough money to continue their lives without you.
