What is insurance - and most importantly, how can it help you?
In a nutshell, insurance is a financial arrangement that allows you to
reduce financial uncertainty for a price.
Included in the price is the amount an insurance company uses to manage the administration and risk of the insurance, and to make a profit.
Here are some examples:
Life Insurance: For a relatively small amount of money (the premium), you receive a relatively large amount of money when you die. This “death benefit” can replace income lost upon your death. Hence, life insurance reduces financial uncertainty driven by the timing of your death, because the death benefit replaces income you’d make were you alive.
Fire insurance: For a relatively small amount of money, you receive funds to help replace your house if it burns down. Hence, fire insurance reduces the financial uncertainty of what would happen if you have a fire.
Long-term care insurance: For a relatively small amount, you receive money to help pay your long-term care costs if necessary. Hence, for the small amount you pay, the uncertainty concerning what you’d need to pay for long-term care insurance decreases.
The list could go on to include car insurance, disability insurance, medical insurance, and so on.
The great thing about insurance is that it helps reduce the uncertainty in your life. It can reduce your worries. It can reduce the amount of money you need to have on hand should something bad happen.
For my wife and me, the best example is long-term care insurance.
As we move into important years before retirement, long-term care insurance allows us to substitute a known insurance premium for the need to accumulate literally hundreds of thousands of dollars, just in case one of us needs long-term care services. It’s a very helpful planning tool for us.
Rest assured, I understand that it can feel frustrating when we need to pay to reduce financial uncertainty.
It can feel too expensive.
It can feel like it’s not a good bet.
The never ending variety of insurance that’s available these days, and all of the options, can make it even more mind-boggling.
That’s when insurance buying decisions become very personal choices – ones that can be difficult to make. They can be especially difficult when family members or close friends get involved. You want to feel educated and confident, but you also probably feel like there are so many options and you don’t want to make the wrong choice and regret it later.
Clear thinking and decisiveness can serve you well when considering how to use insurance to reduce your risk and uncertainty.
And that’s why I’m here - to help you navigate the uncertainty that can come with juggling all of your different options.
I hope this information has been helpful for you - but I’m sure you still have questions.
Give me a call at 503.902.5320 or reach out through my website so that we can set up some time to go over your situation and work on coming up with the best solution for you.