Timing – When to Purchase and When to Reconsider #
Insurance is intended to mitigate financial risks. However, insurance is not always necessary. There are insurance policies for so many possible problems and many of them simply are not relevant to all people or entities.
Some of the most important insurances regard life. Health and life insurance are practical and are much cheaper to purchase when the insured is far from needing them. Insurance is a business of probabilities, and a young, healthy, boring individual is much less likely to make a claim on health or life insurance in the near future. Conversely, a customer who is 95, smoked and drank all his/her life, and still enjoys skydiving once a week is much more likely to claim health or life insurance benefits. Timing is essential when purchasing insurance.
Other insurances, like auto, are only required when one owns or uses a car. If you plan to live in a major city with excellent public transit, your auto insurance is irrelevant (rentals usually have their own insurance attached). Purchase only what you expect to need, and there is little reason to purchase a plan that extends beyond that.
Entering into a policy early will affect lower premiums, but one must be careful not to discount the time value of money or possible life changes. Furthermore, applying earlier is better. Waiting can result in delays or denial, especially if a condition develops too much.
Remember, insurance is meant to mitigate future financial risks, and thereby it may ensure other important benefits, such as preventative medical care or income to purchase food after a major accident at work. Plenty of material is available online, and it may even prove overwhelming. Hopefully, we helped simplify some things about insurance for you. If you are unsure about what insurance is right for you, there are professional insurance brokers who can offer some assistance in choosing the most appropriate plan for your needs.
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