Imagine a world where people are constantly the victim of bad luck. If they have a car wreck, get sick, or their house burns down, they just have to figure out how to pay for the car, their medical treatment, or their house. Sounds pretty scary, right? This is a perfect description of what life would be without insurance. Fortunately, we don’t have to live in a world like that, but the very thought that we could–if we are so foolish as to not protect ourselves–is why insurance is important to me.
First, insurance protects our property. In the event of a car wreck, a house fire or a break-in, insurance pays to replace the things we couldn’t otherwise afford. When I first got my driver’s license, I had two accidents in one week! Fortunately, insurance helped replace my car. Otherwise, I wouldn’t have one today.
Second, insurance protects our health. Medical bills are one of the leading causes of bankruptcy, according to a recent article in The Huffington Post. Insurance helps cushion the blow, and pays people who are injured and cannot work. Thanks to insurance, I know that if I get sick, I can afford to go to the doctor. People without health insurance often have to decide between paying for a doctor’s visit, or paying for their usual expenses. What a terrible choice to be forced to make!
Third, insurance protects our very lives. Both my parents have life insurance, so that if anything happens to either of them, the rest of the family will be financially protected. We never know what is going to happen when we walk out the door in the morning. If anything happened to either of my parents, I would be devastated, but at least my surviving parent wouldn’t be forced to sell our home.
Now what I have described sounds like a great situation–no worries in the event of unplanned circumstances. Like everything in life, there is a downside. And like a lot of other areas of life, the downside is cost. All this great insurance coverage costs money, and there are some tradeoffs–after all, if insurance was free, everyone would be covered for everything.
For example, my parents would probably like to have a lot more life insurance than they do, but when they bought it, they could only afford so much, and they have to keep paying the premiums every month. If either of my parents die, the other won’t be rich by any means, but they will be able to pay their bills. My father has recently been talking about the need to add long-term care insurance, but my parents can’t afford that until they’re no longer paying for college for their kids. The downside to that is that the older they get, the more that coverage will cost. I’ve often heard my father say that he wishes he had bought more life insurance when he was young and it was cheap.
Health insurance is another costly item–and the recent controversies over Obamacare only serve to illustrate how the cost can drive people’s decisions. My parents are have health insurance through their work, but even so, they have to pick between a “Cadillac” policy that covers everything with very little “out of pocket” expenses, and a “Chevrolet” policy that costs less but makes them pay more if they have to use it. This past year, my father rolled the dice and took the cheap policy for himself. For the first time in his life, he actually had to have two medical procedures, and now he has a big hospital bill that he’s paying over time. If he had taken the more expensive policy, he would have been better off, but he had no way of knowing that the medical situation was going to arise. That’s the problem with choosing insurance–life has no guarantees, and no one has all the information they need to make a good decision.
My two wrecks that I mentioned earlier have cost my family a lot of money, too. Almost overnight, our car insurance rates went up–while the coverage stayed the same. The car insurance company figured (rightly, I guess) that I was a greater risk than they had originally thought, Until the company decides otherwise, my parents will be paying for my wrecks every month! However, if any of us get in another wreck, the company will be there to help make sure our cars are fixed!
Even with the downsides, insurance is very important. Without it, we are at the mercy of every unfortunate situation that comes up. While it doesn’t totally protect us from calamity, it does soften the blow. This might sound like I come from a wealthy home (I don’t), but I can’t imagine living life without insurance. I know my parents sleep easier knowing that they have companies “watching their back” in the event of a disastrous situation.
To sum it up, the value of insurance cannot be overstated. Even if a policy is never used, it’s not money wasted. I see it as paying for peace of mind. Then, if an unfortunate situation arises, the insurance is invaluable in helping people avoid financial ruin. Insurance is something that makes sense, both from an emotional and financial standpoint. That is what insurance means to me.
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