All of us wish to achieve financial freedom at some point in our life, and when it comes to doing that, we tend to believe that savings are enough to be financially stable. But, if you look at life from a practical perspective, you would understand that savings alone are not enough to achieve financial freedom; insuring your assets with general insurance policies is equally important.

However, some people believe that they do not require general insurance policies as they can save enough money to replace their assets should anything happen to them. But, consider a situation when you have to wipe off all that you’ve saved all your life, just to pay for your medical bills or a car that is damaged beyond repair.

What is General Insurance?

General insurance, by definition, is the group of non-life insurance policies that provide insurance cover for motor vehicles, houses, health, and travel. These policies have to be renewed according to the tenure prescribed in their respective policy documents, and these have a particular sum insured which is reimbursed depending on the loss from a particular financial event. Typically, it is defined as any insurance type that is does not come under life insurance.

Why Is Insurance Important?

Buying insurance is important as it ensures that you are financially secure to face any type of problem in life, and this is why insurance is a very important part of financial planning. A general insurance company offers insurance policies to secure health, travel, motor vehicle, and home. The convenient part of it is that you can purchase all these insurance policies online nowadays.

Here are the Main Reasons Why Having Insurance is Necessary: -

1. Financially Security

No matter how much you are earning or how much you have saved; your financial position can be dented by an unexpected event in a moment. So, the best way to become financially secure is to cover yourself, your family, and your assets with insurance. You can buy or renew insurance online and receive a payout for financial support, in case there happens to be an unforeseen event.

2. Transfer of Risk

The contract of insurance works on the ‘principle of transfer of financial risk from the insured to the insurer’. As an insured, you pay premiums to receive compensation from the insurer, in case of occurrence of an unforeseen event. So, having insurance reduces the financial burden on your shoulders.

3. Complete Protection for You and Your Family

Family is the most important asset that you have and your family also depends on you for financial support. This is why it is important to make sure that you and your family are completely secure to face any emergency.

4. No More Stress or Tension During Difficult Times

None of us can see the future or predetermine the future events. Any unforeseen tragedy can leave you physically, mentally, and financially strained. So, if you have insurance to take care of the outcomes of such tragedies such as illness, injury or permanent disability, even death- you save yourself and your family from tension and stress. With insurance in place, any financial stress will be taken care of, and you can focus on your recovery.

5. Some Types of Insurances are Compulsory

Insurance is necessary because sometimes it is mandatory as per the law. An example of this is motor insurance. As per the Motor Vehicle Act of 1988, it is compulsory to have at least a third-party motor insurance for every motor vehicle plying on road in India. Motor insurances come in really handy during claims. At IFFCO Tokio, we have improved it even further with our Quick Claim Settlement process which, as the name suggests, expedites the settlement of claims.

5. Peace of Mind

Having insurance offers you financial security and also peace of mind. No amount of money can replace your peace of mind. So, when you have insurance you know that you are secured against any unforeseen events in life, and this gives you complete peace of mind.

The sum of all these reasons provides enough reason as to why insurance is necessary. and with the convenience that you have to buy insurance online from a general insurance company like IFFCO Tokio to secure you, your family, and your assets, both financial freedom, as well as peace of mind, are pretty achievable.

Original Post: https://www.iffcotokio.co.in/general-insurance/why-is-insurance-important