Insurance may seem like a relatively modern concept that needs a certain sophistication of thought and therefore could not have existed in the centuries before, say, George Washington. But to assume that is to overlook great civilizations such as the Mayans, and the Greek and Roman empires. Just because the world didn’t have computers or typewriters, maybe not even quills, that doesn’t mean they didn’t have business brains, and merchants who were making good money would have wanted to safeguard it.
Today we have huge advantages in terms of technology, but insurance principles are broadly similar to how things would have been in the days when Charles Dickens’ characters were laboring over ledgers by candlelight.
1. Understand what you’re paying for
The fundamental requirement when buying insurance is to not only have it explained in detail by the insurer, but to read the small print. Most of us don’t even glance at the T&Cs of most things, but with insurance it is vitally important. Are you covered for this and that? What are the consequences if so-and-so happens? You have to make like a lawyer and root around in this dry, complex text – and ask questions of there are things you’re not sure of. It is the only way to ensure you’re getting what you think you’re getting.
2. Get the Right Cover for the Right Cost
It pays to shop around for insurance, and a good independent insurance agent will do that for you. That could be a sub-heading of its own, in fact: let an agent do it for you. We’re in this business, we think about it all day. You’re not and you don’t, so why put yourself through all the stress and strain when a specialist can sort the wheat from the chaff and give you some options to choose from. Is the premium going to be fixed forever or will it rise over the years? You need to know these things.
3. You might need life insurance for things you are not currently even considering
If you need to take out a loan, or instance, the lender will want to get their money back even if the unthinkable happens to you. They are not going to be distraught as your family and friends will be, but business is business.
As another example, ongoing travel insurance can save a lot of last-minute hassle, so if you are suddenly required to make a business trip to Tokyo or Tibet, or you get the urge to take the family to the Seychelles on vacation, you can hop on the plane with confidence.
4. Don’t skimp
Insurance is an extra cost on your list of regular outgoings, but if you’re going to do it, do it properly. Cutting corners can seem like good financial management at the time, but when the stuff hits the fan, you might wish you’d paid the extra few bucks.
5. Be honest
Insurance becomes invalid if something is discovered that you didn’t declare when you took it out. An existing medical condition or previous health episode that might have caused the premium to be much higher or even ruled out cover completely – it’s better to get this out in the open at the start than have your claim dismissed when you need the money.
Insurance is pretty much 100% a good thing, so just make sure you get it right.
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