Prevention is better than cure” seems to be a saying that can convey the value contained in insurance products. The reason is, insurance is an option for individuals to anticipate various risks in the future.
Indeed, insurance cannot immediately stop potential risks from occurring in the future. However, insurance can reduce the impact of financial losses arising from risks that occur. In other words, getting insurance allows a person to keep all financial planning running properly even if risks occur, such as illness or accident.
Buying insurance products can also be associated with other adages such as “have an umbrella ready before it rains”. Without insurance protection, lurking risks have the potential to disrupt a person’s financial planning in the future.
Not surprisingly, insurance products are often recommended to be owned from as early an age as possible. Purchasing insurance is seen as an important step in efforts to realize healthy financial planning for the future, because more affordable premiums are set for young customers because their risk of disease is lower. On the other hand, delaying or even ignoring insurance ownership can actually make your financial condition vulnerable to the risk of losses that can actually be minimized. The reason is that customers with a higher age generally have higher health risks. Therefore, it is highly recommended to buy insurance at a productive or young age so that the premiums charged are relatively lower.
The following are a number of financial risks that a person can face without insurance protection:
Unsound Financial Governance
Everyone should realize that financial planning for the future does not only focus on saving and investing at a young age without setting aside some of the money to buy insurance. In order to keep your finances stable, it’s a good idea to have insurance. In this way, insurance becomes a complement to a healthy financial plan.
Without insurance, savings and investment profits can immediately be used to pay for hospital and medical costs due to health risks or accidents that can occur at any time. In the end, financial planning becomes a mess that interferes with someone realizing their dreams, for example to own a house, build their own business, go on holiday abroad, or perhaps settle down.
Insurance will keep all a person’s financial planning running. For example, health insurance will pay for treatment and care in accordance with the terms and conditions of the policy if a risk occurs such as an illness or accident that requires hospitalization. That way, insurance customers can get optimal treatment when they are sick without having to drain their savings and investment returns.
Trapped in Debt
Without thorough financial preparation, a person, for example, is forced to apply for a loan or borrow large amounts of money to pay for medical and care costs when sick or when other risks occur. As a consequence, if someone is unable to pay it back, they may fall into debt and find it difficult to pay off their loan.
In contrast to this condition, if the risk occurs when you have become an insurance customer. So you don’t have to worry about paying for the financial impact of risks, for example health, because insurance accepts the transfer of risks from its customers which can disrupt financial planning for the future in accordance with the policy provisions.
Insurance is very useful in anticipating events that require large funds, such as illness that requires medical treatment, or an accident that eliminates the ability to earn a living, or death that stops the source of income for the family left behind. By transferring risks to insurance companies, the potential risk to customers will be smaller.
Without insurance, a number of these risks could erode a person’s emergency funds, in the form of savings or long-term investments. As a result, this step will disrupt someone’s financial plans.
Old Age Is Less Guaranteed
One of the goals of healthy financial planning is to enable someone to enter retirement or old age with sufficient financial resilience. When you enter retirement age, it cannot be denied that the income you get from your work is certainly reduced compared to when you were in your productive age. Therefore, everyone needs to prepare old age funds as early as possible. That way, when you enter retirement age, which is generally between the ages of 55-60 years, you can feel safe and calm.
Insurance is a financial instrument aimed at minimizing financial risks that may occur in the future. Insurance as a solution to financial problems in old age with premium amounts that are flexible and can be adjusted to each customer’s abilities.
By considering the financial risks above, people who do not prepare well for their future will certainly encounter difficulties when risks occur in the future. So, insurance is the right product to maintain financial security for individuals and their families. As the saying goes “prevention is better than cure”, purchasing insurance products as early as possible will be an anticipatory step for individuals to welcome the future more calmly.
