Saturday, January 15, 2011

Why we need Insurance ~sharing is caring~

Given the complicated and fast-changing world we live in today, we encounter many dangers and risks daily. Such vulnerability and openness to jeopardy make us easy prey for predators of all forms, be it financial, physical, etc. Because of this, we ought to find ways to reduce our exposure to risk. To do so, one good way would be to transfer risk to third parties. Here, to gain knowledge on how to transfer risk, please read on!

Today, with our society's complexity, one of the best ways to transfer risk would be through insurance. Many might think that insurance is expensive and a waste of money due to the high premiums paid. However, in contrary to their beliefs, insurance is in fact an important tool everyone ought to use as you basically only pay a tangible cost (money) to get intangible benefits (confidence, certainty, productivity, etc) and tangible claims (if something happens to you).

Here, you can spend 1 to get 2 rewards. Given this, wouldn't insurance be a good investment for you? In fact, I would deem it as a vital investment everyone must have because we are our single most important asset and thus we must protect ourselves well.

In addition, the more assets and money we have, the more insurance we need to protect ourselves from the risk of loss. Here, not buying insurance would be contradictory because when you have more things, the more you will have to lose.

Because of this, having insurance would play a very big role in mitigating your risks. This is because insurance transfers our risk to companies which are more efficient to manage it, thus reducing fear that we do not have enough assets to cover our losses.

As a result, we gain more space to think abundantly, allowing ourselves to be creative and productive. With increased innovation and efficiency, we will create more value and impact the world more profoundly, generating more wealth and benefits for ourselves.

Here, I find a quote from John Ruskin most useful for our need to constantly reduce risk. He said that there is scarcely anything in the world that some man cannot make a little worse and sell at little more cheaply. The person who buys on price alone is this man's lawful prey.

Hence, in conclusion, after enriching yourself with knowledge about transferring risk, I believe readers can now make a choice on whether they want to be a prey for risks. To escape from being the target of risk, you have to divert risk away from you and minimize it. I believe you already know how to do it. Now, take action!

2 comments:

  1. definitely I agree with this...insurance or takaful is really important..we never know what will happen in the future

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  2. yup.. bak kata org tua2.. sediakan payung sblm hujan kan?

    ReplyDelete