Nothing comes for free, whether or not you get insured. If you get insured, you will have to pay a monthly or yearly premium. If you are insured, you will be stress free and will be covered for anything that can happen to you during the course of the year.
As a result, you will have a peace of mind and will be able to live your life as if nothing can ever happen to you.
Insurance is always better than nothing. But it’s still not that uninsurance can directly boost your financial wealth and has lesser risks.
The amount of risk is always the same, and there is always a house edge in life. Even if you are willing to take no risk at all, you are taking a certain amount of risk. The more reasonable risk you take, the better. But if you can’t afford it, then don’t take too much risk.
The insurance industry is all about risks. While it is one of the safest business thanks to the laws of large numbers, from a consumer’s point of view, insurance is all about risks. It’s not “risky” again, it’s just all about risks.
Risks are only different in shape, but identical in size
You need to understand that risk is always a fixed amount. But it’s not like you will have ‘x’ financial loss if something goes wrong. That’s just not how it works.
There are certain risks that are small to take, but there some risks that are too big to take without a sound plan to recover from them.
What you can do from your side is to take the risk suited for you. Some risks are big, some risks are big for you. Don’t take the risk that is too big unless you have a plan on how to get back up once you fall. if you are going to fall, have something that you can use to help yourself get up.
The best way to minimize your risks is to know what other people are doing and don’t blindly copy or follow things.
Instead, understand why someone does something and think about your own situation and see if taking the risk is worth it for you or not.
Insurance vs uninsurance – Different risks
Risks of not getting insured:
- If something happens to your house, you will not get a refund for it.
- If you get sick, you will have to cover everything yourself, which means you have less money to use for other things.
- If you get robbed and they take everything, even your car, then it leaves you with nothing to live off of.
- With insurance comes peace of mind. Lack of insurance can be the cause of anxiety and stress.
Risks of getting insured
- You will spend a certain amount of money each year; you would have rather invested in the financial markets and multiplied it with time.
- You will lose money if the company gets bankrupt or goes into liquidation. (minor possibility)
- You might be paying the insurance company 20 percent of your income each year, for 70 years. Time is money times 2, again.
Getting insured and not getting insured have risks
By now, you must have learned that there are risks indeed. Otherwise how would the insurance company pay their employees, display Ads paying 100s of dollars per single click and still remain in profit? Insurance is clearly not a straight-away profit or loss.
Even if you are trying to beat the insurance company by not paying premiums, you are still taking a risk. Again, it’s all about risks.
If you believe that you are going to live forever and nothing can ever happen to you, then insurance is probably unnecessary for you for now. But if anything happens to you and there is no one helping your loved ones, then it could be too late by that time already as well.
You are taking risk by getting yourself insured, and you are taking risks by doing nothing. Welcome to the world of competition 2.0.
Here, you are either a winner or you aren’t.
If you can afford to take the risk, then take it. If not, then don’t take any risk at all, but you are still taking risk. Do get insured, but invest in the financial markets at the same time. Be rich enough that the term ‘insurance’ does not bother you anymore.