When it comes to getting insurance, some think that it’s just another bill to pay each month. However, what a lot of people don’t realize is that getting insurance can actually help you save money in the long run. In order to understand how this works, it might be a good idea to look at the main types of insurance – professional, health, car, and life – and see how each one can save you money.
1. Protection From Lawsuits
Professional insurance is always a good thing to have, but especially so if you're self-employed or run your own business. When thinking about what does liability insurance cover exactly, the most important thing to remember is that it protects you from lawsuits. Specifically, if the claim made against your small business includes misrepresentation, negligence, or malpractice – all of which are serious offenses – then your professional insurance will cover the potential damages. You may be thinking that you're neither negligent nor do you represent your services in a false manner. While that is commendable, unfortunately, it doesn't really protect you from a disgruntled customer who is looking to take you down. And, in the event that a lawsuit is filed against your small business, professional insurance can help you avoid going bankrupt.
2. Lower Health Care Costs
Health insurance is an important thing for everyone to have, and there are many benefits to having it. One of those benefits is that it can help you lower your health care costs. When you have health insurance, you're more likely to get preventive care, which can help you avoid more serious and costly health problems down the road. In addition, if you do get sick or injured, your health insurance will help you cover the cost of treatment, which can be very expensive. Without health insurance, you would have to pay for all of your medical care out of pocket, and this could quickly become very expensive. Even if you do end up having to pay a portion of your bills out of pocket, the total amount will still be far less than if you didn't have health insurance at all.
3. Save On Car Expenses
Car insurance is something that is required in most states, and there are a few reasons for this. One reason is that it can help you save on car expenses. If you get into an accident, your car insurance will help pay for the cost of repairs. In addition, if your car is stolen, your insurance will reimburse you for the cost of a replacement vehicle. Also, if you cause an accident and are sued by the other driver, your insurance will help pay for their medical bills and any property damage that occurred. Without car insurance, you would have to pay for all of these things on your own. In addition, car insurance can also help you save on your registration fees and taxes.
4. Protection In An Emergency
Last, but certainly not least, life insurance is something that everyone should have. One of the main reasons for this is that it can provide financial protection in case something happens to you. If you die and you have a life insurance policy, the money from the policy will help your loved ones cover the costs of your funeral and any other expenses that they may incur. In addition, if you become disabled and can't work, your life insurance policy will provide you with a monthly income until you're able to go back to work. Without life insurance, your loved ones would have to bear the burden of all of these costs on their own.
As you can see, there are a number of reasons why getting insurance can save you money in the long run. So, the next time you're wondering whether or not you should buy insurance, remember that it's not just another bill to pay each month – it's an investment in your future.
Aidan has been writing about personal finance for over 6 years. Prior to this, he worked as a Corporate Finance Analyst where he specialized in Due Diligence, Company Valuations and more. He is a CFA charterholder.
