The problem with not insuring yourself
Insuring yourself should be a priority. Unfortunately, it’s not always the first thing that people think about when it comes to spending money. Pursuing your dream of owning a home, or whatever else will make you happy, should always be a driving force in your life. We all wish for good health, but not all of us take the necessary steps to help make those wishes a reality. People don’t always eat right and don’t exercise often enough. We all want financial security, yet we would rather spend money than save and invest it for our future. While you cannot script your life down to the last detail, you can do things to ensure that you do not diverge too far off the path toward achieving your goals.
What to think about when insuring yourself?
When you think about insuring yourself, you can look at it in two ways. First, you can buy a variety of insurance policies that will help cover losses to the property you own. Homes, cars, furnishings, and almost anything of value can be insured. You can ensure your life and buy private medical insurance for treatment or care that is outside of coverage under the NHS or expat equivalents.
In the UK like in many countries, it is illegal to operate a motor vehicle on any public road, or in any public place, without having third-party insurance. Third-party insurance is liability insurance that protects other drivers and other parties from bodily injury or property damage while you are operating a motor vehicle. If you fail to buy and maintain this coverage, you could face fines, lose your driving privileges, and even have your car impounded.
What do you need when insuring yourself?
While most types of insurance are optional and you will not be charged with any crime if you elect not to purchase coverage, you may be taking much more of a risk than you think. If you have a family and care about them, you should certainly consider purchasing life assurance. If you are the main support for your spouse and children, and one day you are hit by a car and do not survive the accident, what will they do? While they cannot bring you back, having a sufficient amount of life assurance can at least provide the financial stability they need.
If you own a business, it would be foolish not to have business insurance. While there are many good things about being the head of your own company, there are also many risks that you may face. You need insurance to cover your building and equipment if a fire burns it to the ground. You should have business interruption insurance in the event that fire damage, or another event, forces you to temporarily close down operations. People could come into your property, slip on your floor, and make a claim for the injuries they sustained. Business liability insurance will pay for valid claims and also pay for your defence against questionable claims.
Insurance is usually purchased as a way of transferring risk in the event of something unexpected happening. You don’t expect a tree to come crashing through your roof, but if it does, the cost to remove it and repair the damage can be quite expensive. You don’t expect your friend to sue you if they fall down your stairs and break their leg, but it happens. Insuring yourself protects you against financial liability, but not against all of the things that could go wrong in life.
A second way of looking at insuring yourself has nothing to do with buying an insurance policy. Don’t you want to ensure that you can live the best life possible? You should try to do all that you can to achieve your goals. A good education will give you the best opportunity for finding a good-paying job. Look after your health by maintaining a healthy diet and being physically active. Save and invest wisely so you will accumulate wealth. While money is not the key to happiness, it can provide many of the things we need and want.
About Mike Coady
Mike Coady is an expat expert based in Dubai and is on hand to help with all of the above and more.
Mike is an award-winning money coach and industry leader in the financial sector.
Qualified to UK Financial Conduct Authority (FCA) standards, a member of the Chartered Insurance Institute, a Founding Fellow of the Institute of Sales Professionals (FF.ISP), and a Fellow of the Institute of Directors (FIoD) and featured as a highly qualified Financial Adviser in Which Financial Adviser.
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Blog published by Mike Coady.