The Trouble with Insurance in This Economy
The concept of insurance is getting a lot of mishaps in recent news. Something that is normally considered as a way to lessen financial risk is now ending up a factor that actually increases it. Nowadays, with the downhill trend of economy that we are currently facing, insurance companies that declare bankruptcy is a frightening prospect for a lot of people who have done business with them.
But why are insurance companies so untrusted these days? Some speculate that this is because of a company's outright refusal to hand out insurance to an individual who has a high likelihood of loss. For example, a person who engages in dangerous contact sports may have trouble finding life insurances. If you have a high-risk profile, then chances are you can't legally get insured. To many, this seems like a contradiction of what insurance should be.
Which brings us to the question: What, then, is insurance supposed to be? There are a lot of people who invest in insurance without completely understanding how investing in it will affect our finances. If it concerns our money, a blind investment will put us at risk.
At the heart of it, if you are buying insurance, you are essentially accepting a definite loss of assets (the case being, the payment of a periodical premium) so that even more losses will be averted. But, the loss should be accidental; an insured person cannot deliberately cause something that will allow him or her to gain insurance money. Although it's understandable, there are quite a few unsavory characters who have purposely gotten themselves hurt to gain insurance
Now, this is where potential problems enter. The idea of compensating a loss becomes a problem if the insurance company suddenly goes bankrupt. If that happens, you would just feel like you accepted a loss without gaining anything whatsoever. This, it seems, is what puts off a lot of people. - 23229
But why are insurance companies so untrusted these days? Some speculate that this is because of a company's outright refusal to hand out insurance to an individual who has a high likelihood of loss. For example, a person who engages in dangerous contact sports may have trouble finding life insurances. If you have a high-risk profile, then chances are you can't legally get insured. To many, this seems like a contradiction of what insurance should be.
Which brings us to the question: What, then, is insurance supposed to be? There are a lot of people who invest in insurance without completely understanding how investing in it will affect our finances. If it concerns our money, a blind investment will put us at risk.
At the heart of it, if you are buying insurance, you are essentially accepting a definite loss of assets (the case being, the payment of a periodical premium) so that even more losses will be averted. But, the loss should be accidental; an insured person cannot deliberately cause something that will allow him or her to gain insurance money. Although it's understandable, there are quite a few unsavory characters who have purposely gotten themselves hurt to gain insurance
Now, this is where potential problems enter. The idea of compensating a loss becomes a problem if the insurance company suddenly goes bankrupt. If that happens, you would just feel like you accepted a loss without gaining anything whatsoever. This, it seems, is what puts off a lot of people. - 23229
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posted by X - Men @ 12:15 AM
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