The first thing that many folks think about when the thought of insurance comes to mind are the periodic premiums that they need to pay. It can be significant. Them, they may think about dropping some or all of their insurance.

This may not be a good idea. The real purpose of insurance is to protect you from financial ruin.

After reading this primer, you may wish to obtain more insurance. Be sure to contact an insurance agency Newark DE.

The Bottom Line on Insurance

You buy insurance in order to protect yourself from financial ruin. That is the bottom line. When you obtain insurance, you transfer the vast percentage of that risk to the insurance agent, who will pay the costs should an expensive catastrophe occur in your life. In return for that potentiality, you pay periodic premiums to the insurance company. Yes, insurance premiums may cost some dollars, but the peace of mind that you obtain is valuable as well and worth the cost in most cases.

Common Forms of Insurance

There are many different types of insurance. Again, back to the bottom line, that is because there are a wide variety of situations in which you may be exposed to financial loss.

Common forms of insurance include:

  • Life Insurance: To provide an income stream for your beneficiaries in case of your untimely death.
  • Health Insurance: To cover the costs of maintaining health.
  • Auto and Other Vehicle Insurance: To protect against the costs associated with vehicular accidents
  • Residential Insurance: To provide for home repair if a natural disaster (such as a tornado) causes high-dollar damage
  • Disability Insurance: To protect against income loss because you are unable to work

Insurance may not be fun to talk about, but armed with the knowledge about the real purpose of insurance, you can make better decisions about what kind and how much to obtain.