Insurance is a very powerful tool used to leverage the risk. It is a very good approach to always insure against unforeseen conditions.

Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium.

Insurance is a very simple tool and one has to give importance to it. I was thinking about it lately due to my friend, as he was telling me that it was good for him since he had a health insurance which covered him and his parents and when his mom was ill it helped him. There are various insurances for the needs of the people. I am not getting into the details of it. All that I want to emphasize is that it is good to have one and to make you think in those lines as to why insurance is needed or is it really worth it?

Insurance is a very good option when you are uncertain about the outcome. Have you noticed that whenever you buy any vehicle, the on road price always includes the insurance’s cost? That is because any vehicle that is bought might end up in accident. I am not telling that all vehicles that are bought will end up in accident but the probability of meeting with accident is higher in case of vehicles. I know sometimes we don’t use the insured amount at all and still land up paying premium every year or month depending on your plan. Sometimes I too feel it is a waste of money by paying premium but the truth is not that. It leverages the risk of unforeseen conditions.

Consider that you are driving and you don’t have any insurance for your vehicle and unfortunately you meet with an accident then you have to pay up for your own vehicle’s damage and also the other person’s vehicle if it was your mistake while driving to bang him and also to pay up your medical expenses and other person’s as well. These things you may not worry about when you have insurance.

Why Insurance is needed?

Insurance gives you an option to take risk and move forward. It is always good to have the following insurances: Life insurance, health insurance, vehicle insurance, travel insurance, house insurance and if you work in dangerous environments such as mining then I would suggest you to have some insurance that is related to work related hazards.

Life insurance:

It is good to have life insurance and it is even better if you start at an early age. Since the earlier you start the lesser will be premium of the amount you want to insure. Since interest of the money compounds it is better to give more time. Life insurance is no way useful to you but it will be useful to your family. I understand that when we are not around, how could the money that is provided by the insurance company will be useful? But the truth is that money is required and I feel it is good to do others even if we are not around and one way is to provide them with little monetary help from our end.

Health insurance:

You all know how good your health is. We hardly bother about our health. So it is better we have one good health insurance. It is for our need and it is definitely on top of the list. We are very risky creatures on earth; anything can happen to us so it is better to be prepared. I would urge you to have health insurance for your loved ones as well. Start it early and the premium might be high but it is worth it. Please don’t neglect your health insurance.

Vehicle insurance:

You need not worry much about it. Since when you buy the vehicle you will get your vehicle insured but remember to get the insurance renewed every year. It is mandatory to do so.

Travel insurance:

When you travel abroad make sure you have travel insurance and I think most of you do that. You know how insecure the journeys are these days. Anything can happen any moment. It is better to be prepared.

Home insurance:

I really don’t know whether this is required or not. So I don’t wish to say anything wrong about it.

Insurance is a leverage tool that is used to guard us against calamities. It is better you plan your financial future considering the risk and moreover government does provide tax rebate if you have insurances. So it is good for us on either ways.

Be insured! Live peacefully!


3 thoughts on “Insurance

  1. Sara says:

    I am interested in reading your articles, however they are not showing up correctly in my feed reader. They are cut off after a short intro. I look forward to seeing an improvement soon!

  2. Hi saravanan:
    My first visit to your site. I saw you at Shilpan’s site and came here. I am very impressed with your process of simplifying complex financial targets. As far as insurance, the definition you have given is very similar to Warren Buffet’s definition, since he is in the re-insurance business. Home owners insurance is a must especially for folks living in the US and especially important is making sure that the coverage is adequate. I am also an entrepreneur and business property insurance is equally important. I see so many people that are under insured that it is scary what these guys are thinking. Sure, insurance is an expense but money spent on it wisely is not a waste, just as you are saying. I agree with you. Thank you again.

  3. Saravanan says:


    Thank you Sara for your input. On a lighter note, I want you to visit my site daily and read the articles from my site and not from the feed reader. On a serious note, I am in the process of making my site better. Please bear with me for sometime. I will make suitable changes as per your valuable suggestion. Keep visiting.


    Thanks Raj for your comments. Living in bangalore I really dont know much about home insurance since I dont own a house yet. People don’t really think about Insurance in the right way because no one educates them about it and none of them are bothered about it. Keep visiting.

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