Insurance: is it so necessary?

Money Planet

* You can watch full video from our expert here

Life happens. Surprises can come from anywhere, anytime. You never know when there might be a flood or a fire or you get sick.

Insurance exists for a reason and you need to understand how it works.

If you own your home, what would happen if there was a fire that started in your kitchen and damaged your neighbour’s home? If you rent, does your landlord have insurance that would cover a disaster? If you drive, are you fully covered in a serious accident? What about travel? When you die, will your family receive a life insurance payout?

It’s hard to think about things like this. It feels like all of these terrible things are impossible or far in the distant future. But, it’s crucial to think about it all.

To understand whether you need to buy insurance, look at every option out there. Maybe some are worth it and others aren’t. Your homework today is to understand all of the options out there for you. Consider everything you own and use, and decide if you could replace it if needed.

Not sure if insurance is worth it? Focus on how you can set aside money to replace those basics. Keep thinking back to the lessons on developing multiple sources of income and making your money grow.

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• The essence of bonds;

• What are dividends;