17 Rebecca R

Insurance:  A practice or arrangement by which a company or government agency  provides  a guarantee of  compensation for specified  loss, damage, illness, or death in return for payment of a premium.

After doing some research on insurance for this essay, I was surprise to learn how many different types of insurances there are.  Some of them, I believe most of us are familiar with, while others I am pretty sure most of us have never even heard of.  The most common I came across were:

  • Life Insurance Provides financial protection to the beneficiaries in the event of a death.  This insurance is typically for the head of a household or the primary provider in order to protect their families in the event of a unexpected death.
  • Health Insurance: Helps pay for the cost of expenses incurred when a person is ill, doctors, hospital visits and prescribed medications.
  • Dental and Vision Insurance: Helps pay for the cost of expenses related to dentists or eye doctors.
  • Car Insurance: Helps pay for the cost of expenses due to a car accident or theft of the car.
  • Homeowners’ Insurance: Helps protect against damages to the house itself, or to the possessions in the house.  It also provides liability coverage against accidents in the home or on the property.
  • Renters’ Insurance (AKA Tenants’ Insurance): Similar to homeowner’s insurance, it protects against damages to the tenants’ possession, but it does not include coverage for the dwelling or structure.
  • Long Term and Short Term Disability Insurance: Covers living expenses for either a short or long term if a person is unable to work due to an illness/injury.  The amount given is typically about 60% of the person’s present salary at the time their disability began.

While a few of the unknown were:

  • Annuities: Provides long term investment for retirement purposes and typically have a life product imbedded into the product.
  • Umbrella Insurance: Provides added insurance to an policy; typically increases the amount of a person’s liability coverage,
  • Credit Insurance: Give a company the ability to mitigate risk, provide better financing terms and pledge their account receivables which is typically their largest asset.
  • “Sleep Insurance”: Allows a company to carry large receivables for a few customer, causing a concentration.  It protects holder of the insurance in the case that one of those companies are not able to make payment (protracted default) or files for bankruptcy.
  • Error and Omission Insurance: Error and Omissions is liability protection for professionals should something go wrong. Doctors, insurance agents, lawyers, etc., usually have this type of insurance to protect them in case of a suit.

Even though there are more types of insurances then the ones I have listed, the few described above give an idea of the many different types of insurances available and the purpose of each one.  It is not surprising that regardless of what type of insurance a person or company decides to have, the reason they usually buy insurance is the same:  A person or a company pays a monthly premium for an insurance because they are banking on the protection and financial assistance that insurance will provide during their time of need.

As a young person, I had never been overly concerned with insurance; I just knew that my parents would make sure I was protected.  However, a personal experience made me understand not only the importance of having insurance, but also how crucial it is to have the right insurance.  It taught me how important having the right insurance is when you’re faced with hardship.

When my grandfather was told he had myelofibrosis, a terminal illness that usually claims its victims within 5 years of diagnosis, I saw firsthand the devastation that not having the proper medical insurance coverage can have on a family.   Although my grandfather had medical insurance, it was average at best and soon my grandparents were drowning in bills for procedures and medications that were not covered by their insurance.  They were also unable to afford the medical supplies (wheelchair, shower seat, bed, incontinence pads, etc.) that would have made my grandparents’ terrible situation a little more tolerable.   You see, the insurance they had either didn’t cover the cost at all or required a copay that was too high for my grandparents to afford due to their modest monthly intake.  To make matters worse, they were unable to change to a more comprehensive insurance since a pre-existing condition would not be covered by a new insurance.  When my granddad passed away in 2015, my grandmother was left with a bunch of bills that she couldn’t pay.  This took a toll on my grandmother who has always worked hard to pay her debts.  From this experience I learned that not only is it necessary to have the proper insurance, but of also having the option of having a comprehensive insurance that is affordable.

I often wondered why my grandfather did not have a life Insurance.  Was it because of superstition, neglect, procrastination?  Or again, was it cost that stopped him?  I guess I will never know.  I do, however, know that my grandmother would have benefitted from it.  It would have certainly helped her pay for all the medical bills she had been saddled with.  It could have even possibly given her a little extra to put away in case of an emergency or just so she could enjoy a few extra creature comforts she now has to do without.  There is no doubt in mind that she would have been better off if my grandfather had had life insurance.  I know my parents have policies and that I will definitely have one as well.

Although, I was tainted by my grandparents’ medical insurance experience, I have also been privy to the benefits of having insurance.  For example, aside of paying the deductible, the expense for having my house alarm system replaced due to a lightning strike and the car repaired were completely covered by our insurance company.   In addition, we have been lucky enough to have the proper health, dental and vison insurance that have helped us our medical expenses after meeting the deductible.

In conclusion, with the rising cost of medical services, housing and car repairs, funeral expenses, and our inability to foresee and control the future, having the right insurance is absolutely necessary.  In fact, I strongly believe it is crucial!  Now we just need to work on making sure it is affordable.

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