When and Why Should I Get Insured?

Insurance-Cover
Insurance-Cover
(image Courtesy)

Whether you are a parent or a professional, just starting your career, in transition, or nearing retirement, you need to ensure your future is bright and secure and that the people you love are also catered for. You will require different types of insurance in these stages of your life. Here are reasons explaining when and why you’ll need insurance:

WHEN STARTING A CAREER

Health Insurance
No one plans to get sick or hurt, but most people will require medical cover at some point in their lives. You may think you’re perfectly healthy and might not require medical cover. But it is worth noting that every day, thousands of healthy people break bones, find out they have illnesses, or are told they need surgery. Medical bills from even a minor car accident can wipe out your savings. Health insurance covers these costs and protects you from very high expenses. It may be expensive, but not having it might cost more.

Pension
When you are in your 20’s retirement may seem like a lifetime away and this is probably why not very many are interested in saving for it. Young workers are more focused on kick-starting careers today and not ending them in the long-distant future. However, time is your greatest advantage. Thanks to compound interest, saving a little every month will add up to double or more the money you would get if you started it in your 40’s or 50’s. Its always wise to set a foundation early.

Car Insurance
You may be the most careful driver in the world with a perfect track record, but its better to be safe than sorry. Just like health insurance, auto insurance is a service is a service you pay for but hope you will never need. First of all, it is a legal requirement. Secondly most individuals cannot afford the costs of a car accident. You could one day hit a Mercedes, or worse yet a car full of children. Insurance insures that you will be financially prepared to fix that Mercedes or to pay those children’s medical bills. Your car is an asset and just like any other investment, you must protect it.

TIP: If you depend on public transport it would be wise to consider a personal accident plan.

WHEN SETTLING DOWN/STARTING A FAMILY

Home insurance
Your home is probably your largest and most important investment. It is also one of the most important assets you and your family own. Robberies are not an uncommon thing and can happen to anyone, any time, irrespective of race, creed or social status. Natural disasters like floods, earthquakes, landslides etc., are also unpredictable and can take a huge toll on your finances. Replacing household goods can be extremely expensive. People take out home insurance for the same reason they take out car and health insurance: If a home is damaged or someone else injured on the property, insurance helps owners lighten the financial burden.

You can read about home insurance in Kenya here.

TIP: Annually check your home insurance policy to ensure its up to date with details of certain items such as laptops, mobile phones and other electronics you may upgrade over time.

Life insurance
If you died suddenly, would your family continue meet all their financial obligations from paying rent and other household bills to daily living expenses? If your children, partner or other relatives depend on your income then you probably need life insurance, since it will help provide for your family in the event of your death.
If you are single, or if your partner can provide sufficiently for your family you may not need life insurance. But, you may want to set aside enough money in savings to cover any funeral expenses. Medical bills, funeral expenses and burial costs are not cheap. Your family’s emotional struggles don’t need to be compounded by financial difficulties. Life insurance can be used to plan for these final expenses.

By the time your children are ready to leave the home you would have saved a lot of money. When your policies mature, you’ll be financially stable enough to enjoy your retirement peacefully.

(image courtesy: prudent-advice.com)

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