It is quite amusing to know that as important and necessary as insurance, people do not like to concern themselves with it.

Curiosity forces one to ask as to what could be the reason for this? Is it nonchalance or ignorance?

However, it is important to know that protecting your assets is a vital step in creating a solid personal financial plan.

The right insurance policies will go a long way towards helping you safeguard not only yourself and loved ones, but also your most prized possession.

In my opinion, insurance is like a life jacket; you are so thankful you have it when you need it. And if you don’t have it...well, pray well.

Here are 3 insurance policies that are important for you to know;

1. Property insurance

This is the type of insurance policy that provides protection against most risks to property, such as fire, theft and some weather damage.

This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, or boiler insurance. In this policy, the property is insured in two main ways- open perils and named perils.

Open perils cover all the causes of loss not specifically excluded in the policy. Common exclusions on open peril policies include damage resulting from earthquakes, floods, nuclear incidents, acts of terrorism, and war.

Named perils require the actual cause of loss to be listed in the policy for insurance to be provided. The more common named perils include such damage-causing events as fire, lightning, explosion, and theft.

Importance of property insurance

Just like any other insurance policy, the importance of it is known upon the occurrence of a disaster. And in property insurance, the rebirth of an insured property is ensured after the happening of a tragic event.

And, if for example, you are living in a rented apartment, there is also a ‘renters insurance policy.’ This is also important because your belongings inside the dwelling can add up to a significant amount of money.

In the event of a burglary, fire or disaster you should be able to at least have a policy that can cover most of the replacement costs

2. Life insurance

This is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money (the benefit) in exchange for a premium, upon the death of the policyholder. Depending on the contract, other events such as terminal illness or critical illness can also trigger payment. The policy holder typically pays a premium, either regularly or as one lump sum. Other expenses (such as funeral expenses) can also be included in the benefits.

Also, life policies are legal contracts and the terms of the contract describe the limitations of the insured events. Specific exclusions are often written into the contract to limit the liability of the insurer; common examples are claims relating to suicide, fraud, war, riot, and civil commotion.

Importance of life insurance

Undoubtedly, the absence of a breadwinner leaves open the door for hardship to come in. When you are insured, the turnout of events becomes positive & encouraging.

From parents to children to wife, everyone is protected. And their normal standard of living is sustained.

3. Health insurance

This is the type of insurance policy that kicks against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care and health system expenses, among a targeted group, an insurer can develop a routine finance structure; such as a monthly premium or payroll tax, to ensure that money is available to pay for the health care benefits specified in the insurance agreement.

Importance of health insurance

The importance of this policy cannot be overestimated. And this is because if you don’t have it and need to go to the hospital, you’ll be paying those medical bills for years, maybe even decades.

Depending on your health concern, you could be talking about hundreds of thousands of naira here. For the good of yourself, be encourage to go get a health insurance.

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