Must-Have Insurance Policy for You and Your Loved Ones

must-have insurance policy

Now more than ever, the need for individuals to protect themselves and their loved ones against unforeseen circumstances with insurance is on the front burner. “Insurance as a risk protection mechanism plays an important role in nine of the SDGs” identified by the UN. Theses include; “No Poverty, Reduced Inequalities, Zero Hunger, Good Health and Well-being, Gender Equality, Decent Work and Economic Growth, Industry Innovation and Infrastructure, Climate Change and Partnerships for Goals.

While humans can’t know what the next moment holds for them, having the right insurance policy for yourself and your loved ones can protect you against unexpected circumstances. Consider the following must-have insurance policy for you and your loved ones this year, but let us get started with a few benefits of having an insurance cover below

What are the Benefits of Having Insurance? 

Having insurance is one of the most thoughtful decisions you can make for yourself and your loved ones. While there are several reasons why having insurance is essential, here are three stand out benefits that every person should consider:

Covers against uncertainty: This is a crucial benefit of having insurance cover. You can conveniently transfer risk from you or your loved ones to your insurer with insurance. 

Helps to maintain a living standard: Insurance can be a safety net when things go wrong. Insurance provides financial support to ensure that people can sustain and maintain their living standards in a situation where there’s a risk of unforeseen losses. 

Erases dependency: An insurance plan erases the chances of you or your loved ones getting stranded and having to depend on other people in the occurrence of an unfortunate event. Even in death cases, an insurance policy will significantly reduce the financial costs that come with the death of a loved one. 

6 Must-Have Insurance Policy for Everyone

Purchasing the right type and amount of insurance is always determined by your specific situation. Factors such as the insurance available to you in your country, your age, goals and needs, employment benefits, lifestyle etc., all play a role in determining the kind of insurance policies you should get. However, the following are considered a must-have insurance policy; they are as follows;

Life insurance: The goal of life insurance is to protect the people that are currently dependent on you. If you look around you, are there people that would face difficult financial situations if you died? If your answer is yes, this is your cue to get a life insurance policy. 

Depending on your contract, terminal illnesses can also trigger your life insurance payment, and they can also be used to supplement your retirement savings. Many people tend to assume that the cost of having life insurance is high, whereas, depending on the type of cover you get, life insurance is relatively cheap. 

Health insurance: There’s a famous saying that goes, “you are one illness away from being poor,” and this is the reality for most Nigerians as only 33% of Nigerians have active health insurance plans. In contrast, an additional 5% revealed that family and friends settle their medical bills, according to a new report from NOI polls

Arguably the most crucial type of insurance policy to have, health insurance protects against the cost of medical care in an event where you or your loved one suffer an injury or illness. One of the cheapest ways to get health insurance as an employee is by participating in your employer’s insurance program. It is also essential that dependents are adequately covered because anyone may require urgent medical care, which can strain finances. 

Home Insurance: While people might argue that this policy is a luxury, we believe that to protect yourself and your loved ones from unfortunate home incidents, this policy is a necessity. A home insurance policy covers the destruction and damage to a home, the loss or theft of possessions and personal liability harm to others. There are two significant types of home insurance; homeowners insurance and renter’s insurance. 

a. The homeowner Insurance – This policy is usually taken by the owner of a home. Insurance generally covers the cost to replace a home and personal property in the house in case of a total loss of the home. It covers the actual homebuilding. 

b. The renter’s insurance – This insurance policy only covers the loss of personal property in a home and liability. If you are renting or leasing a home, this is the right insurance policy to get. It is possible for your landlord to already own a homeowners insurance policy, but this policy does not cover tenants in the event of property loss. 

Auto/Car insurance: In most places, Nigeria inclusive, a particular type of auto insurance policy is required. Accidents can happen quickly and can turn out to be tragic. A car insurance policy protects you from financial risks in car theft or accidents. Depending on the type of policy you purchase, you can cover yourself and a third party. Not owning auto insurance saves you just a tiny amount of money and puts you at risk.

Travel Insurance: If you or your loved ones tend to travel regularly, then having a travel insurance policy is a great decision. Travel Insurance offers protection that includes; trip cancellation or interruption coverage, getting stranded, baggage and personal effects coverage, medical expense coverage, and accidental death or flight accident coverage. Travel Insurance is also not just limited to trips outside Nigeria; you can get protection for even trips within the country. 

Device Insurance: The increasing costs of owning a device have made getting device insurance necessary. In the case of loss, theft or damage, a device insurance policy covers you and helps you fully or partially pay for the repair or replacement of your device. This drastically reduces the financial burden of unforeseen situations of loss or damage. 

Purchasing any of these must-have insurance policies is an intelligent way to plan your finances and keep yourself and your loved ones protected from the financial burden of an unfortunate event. 

How Much Insurance is Enough? 

There’s insurance for everyone. While it is natural to feel an urge to protect yourself and your loved ones against any calamity, there are a few types of insurance that would end up being redundant. 

Before buying any other insurance policy, ensure that you are not paying for just another insurance cover. What you should seek to achieve is to provide the needed financial relief for the particular scenarios. For example, buying a flood insurance policy in areas not prone to flood is not beneficial for you and your loved ones. 

If you end up paying too much on insurance, you can significantly reduce your quality of life which is counterproductive. Remember, insurance is to protect you and not hurt your finances.

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