In today’s elaborate financial world, insurance has established its place as one of the most important financial products you can find. The process of safeguarding the interests of different groups of people from financial uncertainties has inspired the blossoming of the insurance industry. Having an insurance policy is not only considered useful in these modern times, but also necessary for individuals as well as businesses. But why is insurance given such gravity?
The Benefits of Having an Insurance Policy
Even without giving regard to any specific kind of insurance, there are benefits that stand to be gained by buying into a policy.
Security – It is the one characteristic that is consistent with all insurance policies. They all grant a sense of security that any unprecedented events in the future such as theft and damage, loss of income, or even loss of life, will not bring any kind of financial hardship. In the context of mortgages and loans, insurance, such as payment protection insurance, safeguards against default payments, should the borrower become unable to fulfill his repayment obligations.
Peace of Mind – It is a benefit accrued from the sense of security that insurance affords a policy holder. Without the need to worry about any uncertainties in the future, a person is able to shift their focus towards productivity in either work, or their personal lives. You cannot really put a price on being able to rest easier at night, which is why insurance receives such favor amongst the financial elite.
Self-Dependency – In many ways, insurance helps you become more independent. With insurance, you service the premiums when you are in good financial health. And when that takes a turn for the worse, the policy takes up whatever responsibilities you had, and as such, you are able to continue with life without looking up to anyone. In the context of payment protection insurance, when you buy a loan protection policy for your car or your mortgage, you are able to keep them, should you lose your source of income. This way, you can focus on re-entering the employment world, as all of your repayments will still be made timely.
Removes the need for Readjustment – With insurance, you don’t have to make do with a lower standard of life, should you encounter an eventuality that reduces your income potential. This holds true for extent payment protection insurance, as an accepted PPI claim will help you maintain your kind of lifestyle.
Credit Protection – Maintaining a good credit is essential in today’s world. Without a good credit history, you are locked away from good financial opportunities. With payment protection insurance, you are able to maintain your high credit as all your repayments will still be made on time. Your credibility will therefore not be affected, and your financial health will stay in check.
Financial Discipline – Insurance premiums have to be repaid in a timely fashion, with only a few days of grace being allowed. This forceful compulsion means you have to exercise some financial responsibility so that all your payments are made in time. In the beginning it might be hard to balance your financial math to accommodate these payments, but eventually, the habit catches on. Beneath all this, there is a sense of discipline that you are forced to develop, especially if you are able to stay up to date with the payments. It is a quality that can pour over into your larger financial life, if you let it.
Insurance is an integral part of our financial universe today. Not all insurance products boast the same level of importance, but each of them serves a useful purpose, and that needs to be appreciated.
Samuel Jones writes regularly on insurances and finance related topics. He has also written many articles on PPI Claim.