Insurance allows individuals and businesses to protect themselves against significant damage. By saying significant it is meant that if the damage is minor, then the insurance company will not compensate it. In your turn, you will hardly find it worth to pay a monthly premium to protect against a loss equaling 50$ or less, because this would not be considered a financial hardship.

An example where insurance makes sence is life insurance. Take you end up with premature death. If you were the only person who brings income to your family, then it would be hard for your family members to overcome the financial hardship. In this case the insurance comes due and your family receives compensation from the insurance company. This is how insurance works in similar circumstances.

If you want to protect yourself or other people by unpredicted financial losses then the types of insurance may include:

  • Taking care of your family in case of your decease
  • Paying back your debts after your decease
  • Compensating contingent liabilities
  • To assue compensation against death of the key employee in your vocation.
  • Aquiring a partner or a stockholder in case of their death
  • Preserving your business against unpredicted termination and loss of revenue
  • Covering costs of unpredicted health issues
  • Protecting your residence against theft, flood and other threats
  • Protecting yourself against claims
  • Covering yourself on the assumption of invalidity
  • Covering the costs in case your car was robbed/stolen by reason of misadventure