Do you have insurance?
There are a few things I loathe paying for. Taxes. Parking Tickets. Late fees. Insurance.
Taxes are inevitable. The middle two are a consequence of poor planning on my part. Insurance, however, serves a very real, very necessary purpose. There are many kinds of insurance (from travel insurance to life insurance). While some may be up for discussion, insurance for your major debts and against your income (i.e. home insurance and life insurance) is worth paying for- and it is part of a responsible financial plan. Here is why:
Don’t roll the dice
You may think that paying insurance premiums (whether they are for car, homeowner or life insurance) are a pain in the butt.
Understand the why of what you are doing though. You are essentially paying bits at a time to transfer the cost of potential losses to the insurance company.
Think about it. If your house burns down, floods or gets otherwise destroyed, how are you going to pay for it- not to mention all of the contents inside? If your income (or your spouse’s) stops due to death or injury, how will you replace it?
Control the uncontrollable
You can do everything right. You can scrimp and save and follow your budget to a “T”- but then a life event or circumstance comes along and blindsides you (think fire, theft, natural disaster, injury, disability or even death).
Not only are you left with the supreme emotional tolls of experiencing a traumatic event (like any of those left above) but you are often left with financial hardship, that will ramp up the stress levels in tandem.
Insurance is that kind of thing that you only want it when you need it. And in one of the more ironic twists in the financial landscape- when you need it, you likely won’t be able to get it.
Not the most fun of subjects, but one that will be remembered with gratitude should you ever need to fall back on your insurance coverage.