An important step to financial success really should include an assessment of financial risks, and there are many, then to take deliberate steps to mitigate those risks. To protect against the risk of financial loss(es) in the face of an unforeseen catastrophe is important. Thus insurance becomes a very dependable financial tool to aid in protecting one against such risk of loss. Insurance serves to share the loss. The client, customer, or member accepts the insurance policy offered and in doing so transfers a share of the risk of financial loss in exchange for a premium.
Warren Buffett mentions one of two reasons for securing insurance, “To protect yourself against a loss that you are unable or unwilling to bear yourself.”
So what is an example of financial risks?
The cost of healthcare, chiefly in the event of a catastrophic accident or serious illness is a real financial risk. Considering the cost of hospitalization, skilled nursing care, complex imaging, and medicines are quite formidable. Here in the United States, personal bankruptcies were commonly attributed to the cost of medical healthcare. Some people, in considering the question as to whether or not to secure health insurance, simply write it off with the mindset, “I’m healthy and rarely go to the doctor for anything.”
Yet such a mindset negligently ignores the cost and in lieu of the potential for serious accident or illness (which cannot or even should not be predicted). Generally, health insurance (especially for the low and middle class) is a worthy cost to risk and therefore should be secured. But the premiums are paid and the insurance may not be used. How is that a good decision?
Why should you secure insurance?
Health insurance really should be used in annual primary care physician visits for a great majority of people. It would be a good discipline even for those who consider themselves to be in good health. So the policy, with lower copays/coinsurance to the primary care physician, blood labs, x-rays, and prescribing generic drugs compared to the cost one would bear without insurance. So in regard to insurance in general and health insurance specifically, unless one is independently wealthy and willing and able to bear the cost of financial risks that inevitably occur … one should secure insurance.
I suggest, when securing insurance as a strategy to mitigate financial risks, securing a suite of insurance policies. In addition to home-owners, and automobile insurance, the suite of insurance I advise people to give serious consideration toward is:
- Health insurance
- Life insurance
- Income insurance known as disability insurance
- Long-term care insurance
- And utilize options offered by highly rated insurance companies to protect one’s retirement savings.
Let’s discuss further these solutions to what could be genuinely catastrophic financial losses for you and your loved ones. You can reach out to me at 210.383.3687, or email me at financialfreedom1st@gmail.com. Visit Zenith Freedom Financial Services on Facebook. I look forward to being of help to you and will do my best.
Edward Quisenberry
Texas Licensed Independent Insurance agent-broker
“Helping People Up!”
