It all goes back to the idea that insurance, when activated, makes policyholders whole again. Another important reason to save money is your retirement. This reason is tied to No. With rising medical costs, health insurance is mandatory to hold. Your present might be stable with your steady flow of income that is good enough to meet your family’s lifestyle needs. 4). Unfortunately, it is a necessary evil, and people don’t feel that they really have to have it until they’re in an accident. Insurance, an intangible, provides another intangible: peace of mind. If you have life goals, such as a worry-free retirement, education for your children at the best schools and colleges, buying a house or a car — then building a financial plan can help you achieve these goals. Term insurance is one of the life insurance plans offers life coverage to the individual for a specified term with affordable premium cost. It’s valuable that you point out that it’s important to have insurance for your business to protect you in case you get sued. The reason why liability coverage is so important is because it compensates, or makes whole, another individual should you be involved in an accident where you are at fault. Health insurance terms to know. The obvious and most important benefit of insurance is the payment of losses. Insurance is a great investment channel as well. The right type of business insurance can be as important as having business insurance coverage at all. There are various types of insurance products like life insurance plans, term insurance, health insurance, home insurance and more. By law, you are required to purchase car insurance, and health insurance can protect against major (and possibly financially devastating) health problems and costs.. Other types of insurance, like life and disability, can be very helpful in securing your family’s future, depending on your particular situation. When you look at your industry, you see the "big guys" and the "small guys." This is done by proactively DE-RISKING their business so they can be less dependent on insurance. Will your family be able to meet their future needs without you? Let's back up and take a big-picture view of why insurance matters. Insurance is important because it is designed to pay various types of claims depending on the type of policy that applies. If you have a flood or some kind of damage to your expensive belongings due to Mother Nature or any other cause, you can end up losing everything. The risk of falling sick, risk of losing your car, the risk of facing an accident when travelling in your bike, the risk of your own death and more can be dealt with an effective insurance policy. There is virtually nothing that you cannot insure, but protecting yourself and your assets against loss is one of the most important reasons for having insurance. Not having the proper coverage can result in a devastating lawsuit or liability claim. Forms of property insurance include auto insurance, homeowners insurance, renter’s insurance, and flood insurance. Protiviti’s Jim DeLoach provides a definition of ERM and explains why it’s important. why is financial planning necessary? Enterprise risk management (ERM) is an enigma. Here are the top reasons why insurance is important. The purpose of insurance is to protect you from unexpected financial burdens due to catastrophic events. In short, to get the money your business needs to keep going, it’s likely you enjoy the benefits of insurance. Insurance provides for an effective risk management in life. A sobering example of insurance in action is the West Fertilizer Co. explosion in Texas this spring. If a risk goes wrong, the big guys will be able to survive. Life insurance can support the life of a family, should a member be lost. People always stress on how much money they need to pay upfront for the insurance product, instead of looking at the big picture. This reason is the counterpart to No. HNI has offices in Milwaukee, Chicago, and Minneapolis. To Protect Your Family and Loved Ones If your loved ones depend on your financial support for their livelihood, then life insurance is a must, because it replaces your income when you die. Yet, those same individuals haven’t taken the important step of buying disability insurance because they perceive it to be “too expensive.” The average cost of an individual disability policy is 1.5% to 3% of your income to protect about 55-65% of your income on a TAX-FREE basis. This type of insurance is especially important in a medical office because errors can result in debilitating and even fatal consequences. Sometimes, though, it's tempting to question the value of insurance because it is an intangible product. Be it, life insurance plans, term insurance, health insurance or vehicle insurance, the importance of insurance is to be understood by all. Important types of insurance typically include policies that are purchased for an automobile, a home and those provided by an employer, such as a group health insurance policy. Since the other guy has insurance the insurance company pays for your repair or a percent depending on your coverage plan. Acts of war are not covered by insurance. The big question was, How would the 9/11 attacks be classified? HNI works with high-performing companies to help them address the hidden risks in their business and avoid The Insurance Dependency Trap. You never know when you’ll have a medical emergency like we did. Before funding your mortgage or refinancing, the mortgage company will typically ask you to provide proof that your home is adequately insured. Life in very uncertain and has a way of throwing surprises at you when you least expect it. In some cases, homeowners insurance is required. If you get into a car accident and damage your car; auto insurance helps pay for repairs. The core of any insurance plan is to offer you with protection. However, after 9/11, some insurers began excluding terrorism. Auto insurance helps mitigate the risk of life on the road (of which there are many!). Protection for you and your family Your family depend on your financial support to enjoy a decent standard of living, which is why insurance is especially important once you start a family. For example, life insurance plans safeguard your family and their financial needs, in case of your unfortunate and untimely demise. One of the most necessary types of insurance plans that meet the needs of most people is auto insurance. Here are seven reasons why insurance is important. Chapter 10: Financial Planning Case 1. It’s similar for a business. When you buy insurance, you're buying a promise. Along with the life cover, they also provide maturity benefit, resulting in a great savings corpus for the future. Insurance is important because it basically protects you Finnancially. Explanation: Insurance is a agreement where a person gets financial protection or compensation on any type of damages from the insurance corporation.. Providing protection and mitigating your risk is the simple motive of insurance. In case of term insurance plans, your family will not have to face financial ordeal in the event of your untimely death and you can gain coverage for the given term at an affordable cost. Was terrorism an act of war? Life insurance is scary thing to think about but it is an essential part of financial planning. 2 — lenders require insurance. Paying for homeowners insurance makes some people cringe. Why is having insurance important? HNI also offers the basic services of insurance and employee benefits. A prized possession like your car or bike also needs protection in the form of vehicle insurance in order to safeguard you from out of pocket expenses towards it repairs or uneventful loss. The reality is companies think they … With your own car, you are likely to cut down on costs and time spent on public transport. Health insurance protects you from unexpected, high medical costs. For example, if you have a mortgage, your lender is most likely going to require that you have homeowners insurance, says the Insurance Information Institute (III). This is where a term insurance plan comes in handy. It means the people who matter most in your life may be protected from financial hardship if the unexpected happens. Family Security: Providing for your family's financial security is an important part of the financial planning process. Business owners can take on certain business ventures because they can shift the risk — thanks to insurance. Live a peaceful life and manage your risks that you can face in everyday life. Life Insurance . Safeguard your life with insurance and realize its benefits. You can avoid out of pocket payments for unfortunate events like medical ailments, loss of your bike, accidents and more. It is important for people who rent to have insurance because of the property you own inside your apartment can be damaged and never be returned. Insurance is something many business owners don't want to think about. Health insurance covers essential health benefits critical to maintaining your health and treating illness and accidents. It means the people who matter most in your life are protected from financial hardship if the unexpected happens. The explosion did $100 million in damage to the community, including schools and hospitals. The greatest benefits of life insurance include the ability to cover your funeral expenses and provide for those you leave behind. Fortunately, the insurance industry decided the attacks were not an act of war. Secure the future of your family and buy a term insurance policy that will help your nominee or dependent receive a lump sum or monthly payout to help them deal with their financial necessities. If a tornado takes the roof off your house, your homeowner’s insurance helps to replace it. However, after 9/11, some insurers began excluding terrorism. In the days after the 9/11 attacks, there were many worries about insurance coverage. They can take a hit. Insurance is tricky. HNI has offices. Here are a few other reasons why having life insurance is important. In this case, insurance likely prevented many businesses from avoiding terrorist-targeted operations, such as refineries and chemical haulers. Without insurance, your winning business model can't get the funding it needs to take its first step, or your established business model can't get the funding to evolve and better compete. Fortunately, the insurance industry decided the attacks were not an act of war. With insurance, however, the little guys have support if they want to take a risk, which means they stick around longer. Why Is Homeowners Insurance Important?. Financial Security - No matter how strong your financial position is today, an unexpected event can out your money at … Insurance is the required (by lenders) safety net that lets entrepreneurs explore opportunity. When deciding on the right health plan, it's important to know the terms related to health insurance costs: Premiums – What you pay to have insurance. Acts of war are not covered by insurance. A great example of this is auto insurance. It's a promise that if something catastrophic happens to your business, your carrier is going to assist you to make your business whole again. This reason why insurance is important dovetails nicely with peace of mind (No. What’s more is the city also is suing the suppliers to the fertilizer plant, claiming they knew they were supplying inherently dangerous materials. Extra coverages include Gap Insurance, Rental Insurance, Roadside Assistance, Custom Equipment, OEM Endorsement, Minor Violation Forgiveness and Accident Forgiveness. Out-of-pocket costs – What you have to pay when you get healthcare services. Providing protection and mitigating your risk is the simple motive of insurance. Car Insurance Extras . What more would you add? You know that insurance is a necessity in some cases. Think about it: Mortgage lenders want proof of insurance before you buy or build a new building. Lenders require that you have insurance. The big question was, How would the 9/11 attacks be classified? An insurance policy is a contract used to indemnify individuals and organizations for covered losses. What it comes down to is that insurance helps prevent monopolies from forming. There are many different kinds of insurance, some of which cover a person and some of which cover businesses and other entities. Hopefully these stories have shown you just how important life insurance is and that it can save the lives of the people you live with. Saving for retirement often takes place within special retirement accounts, such as a 401(k). life insurance plans offers life coverage, Product Management Concepts for Better Personal Finance, Importance of Capital Budgeting and Planning, 3 Ways a ‘Free’ Trial Won’t Ever Cost You Money Again, 4 Basic Money-Related Concepts You Need to Understand, 4 Things You Need to Know Before You Do Your Taxes | The Motley Fool. But, what will happen, if you suddenly have to face the end of your life? But the federal government stepped in and required coverage in the name of keeping commerce moving. Making that small investment in any insurance plans, will enable you to be tension-free and offer security in advance. In this case, insurance likely prevented many busin… Secure your life with insurance and ensure that you live your life tension-free. In the days after the 9/11 attacks, there were many worries about insurance coverage. No one plans to get sick or hurt, but most people need medical care at some point. Life Insurance. Protect you and your family with the coverage of your health insurance that will provide for your healthcare costs. Why is it important for people who rent to have insurance? Insurance is important because it protects a person or entity from extreme financial loss or responsibility due to an unfortunate emergency, accident or negative unforeseen event. In the case of the West, Texas, plant explosion, insurance could have helped a community to recover after a crisis. If enough little guys leave the industry (and one big guy swallows them up), you're left with a monopoly. Should a key member or piece of equipment go out of commission, the business can carry on, thanks to insurance. In order to be fully prepared to deal with the contingencies in life, insurance is very essential. You can have a complete peace of mind, when you manage the uncertainties of life with insurance. The sooner you start saving for retirement, the less you will have to save in the future. 5 Reasons Why Car Insurance Is So Important Cars have become a necessary part of most people’s lives, as they are the convenient for moving around. Was terrorism an act of war? Insurance is important because sometimes it's the law! Now the city is suing West Fertilizer and likely will win all of the company’s remaining property and assets that were not damaged by the disaster. To secure our life. Let's say you run into somebody's car and you dont have insurance. It is important to have insurance because of the following reason. 1. Buy Safety and Protection in Advance and Be Smart. But the little guys can't take a hit. Money invested in these special accounts has the potential to appreciate in value, earning interest. 2. This is why insurance is especially important once you start a family. As a result, they are more risk averse, and in some cases, they sell out to the big guys. The fertilizer company had only $1 million in general liability coverage. If you don’t have health insurance coverage, it might be a good idea to start looking for coverage today. Copayment – What you pay each time you visit a provider. Auto insurance is compulsory in Wisconsin (home of HNI HQ). It's not like buying a chair or a shirt or groceries. I’m thinking about buying a restaurant in the near future, so I will probably want to purchase some good business insurance for it. Learn more about the different types of insurance that companies can choose from and how to … But whether they think about insurance, with hope it's there, allowing for transfer of risk and providing a safety net for new opportunities. Insurance is a safety net for when risks go wrong. The main enemy of life is uncertainties and one can plan for the uncertainties in life with insurance. 1. But the federal government stepped in and required coverage in the name of keeping commerce moving. Liability insurance protects the insured in the event she is held responsible for losses, damages, or injuries. Make use of such insurance plans to alleviate the risk factor in your life. Your family should not be left alone to struggle in your absence and life insurance plans will come to their rescue. It may … Health insurance provides all healthcare costs. Let’s say that you own a house free and clear and have a tidy nest egg . HNI also offers the basic services of insurance and employee benefits. That’s why it’s important to buy the right level of car insurance coverage from a company with industry-leading insurance products and a reputation for great claims service. Insurance is not just a tax-saving tool, but also offers you several key benefits. Car insurance policies provide a lot of different optional kinds of coverage which can prove to be important too. Life insurance plans facilitates systematic savings by allocating funds in the form of premium every year. Having the proper insurance coverage and policies in place can provide peace of mind for you and your loved ones.. Investment: A proper financial plan considers your personal circumstances, objectives and risk tolerance. Workers' compensation is a form of compulsory insurance that's required in most states. At the end of the policy term, the policy holder can reap the benefits by getting a lump sum payout that will result in a great wealth corpus. 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