In one form or another, we all own insurance. Whether it’s auto, medical, liability, disability or life, insurance serves as an excellent risk-management and wealth-preservation tool.
Having the right kind of insurance is a critical component of any good financial plan. While most of us own insurance, many of us don’t understand what it is or how it works.
Insurance is a form of risk management in which the insured transfers the cost of potential loss to another entity in exchange for monetary compensation known as the premium.
Insurance allows individuals, businesses and other entities to protect themselves against significant potential losses and financial hardship at a reasonably affordable rate. We say “significant” because if the potential loss is small, then it doesn’t make sense to pay a premium to protect against the loss. After all, you would not pay a monthly premium to protect against a $50 loss because this would not be considered a financial hardship for most.
Here at Insurance in the UK you’ll find updated information and tutorials about the most popular kinds of insurance.