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Insurance: A Guide for Beginners

It is central to sound financial planning to have the right kind of insurance. Some people do not really know what insurance is and why should anyone have it even though some of them already have one. Representatives are so greedy to earn big commissions that they sell their products together with an insurance and this happening is perhaps the most rampant mis – selling of a financial product.

What we called insurance is a way of spreading out significant financial risk of a person to a large group of individuals in the occurrence of an unfortunate event that is predefined. The monthly or annual compensation that is paid to the insurance company is what the insurance cost. The insurance money will not be of use if the said predefined event on the insurance has not happened yet. To lighten anyone’s financial burden in the event of shock is the sole purpose of an insurance.

There are countless varieties of insurance to choose from. Having an insurance is a necessity it is because we cannot be able to know our future and stop unpleasant things from happening. Do not let any representative influence your decision and choose the kind of insurance that what you think is right for you. Reading the policy documents is a must for you to know and to understand and know what is covered, what features are offered and what events are excluded from being insured.
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You should be cautious of agents out there that talks about unnecessary policies. It is better that you avail the policies that cover a host of possible events under the same cover instead of buying separate insurance for specific assets or incidents. Do not go for policies that are unnecessary such accidents policy if you have a work that is not that prone to accidents and stuff.
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You should make sure that before you sign on the contract, you have already understood what items are covered and what items are exempted from the cover. If you discovered that the item you hoped to cover with the insurance was actually excluded would be so unfair and devastating during an event of damage or loss. After being treated for diseases only to realize that the particular disease was excluded, a lot of people would go rushing to their insurance company. You should understand details such as when the cover begins and ends and how claims can be filed and losses be reported.

Happenings that are life changing like when you’re getting married, when you have children, when your income increases your decreases substantially, when you’re buying a house/car and when you’re responsible for your ageing parents, is the time when you should review your policies.