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Why Insurance Investment is Never a Sunk Cost

Why Insurance Investment is Never a Sunk Cost Leave a comment

I am an economist and the founder and owner of Finance Blog Zone

insurance investment

If you are ever in a position where you need to take on insurance, it is easy to try and find a way out. Insurance premiums can be surprisingly costly, and for many people, it can be hard to justify insurance costs over time. Indeed, while some forms of insurance – such as car insurance – are legally mandatory, other forms of insurance are not.

However, while it might seem like a waste of money to invest in some insurance policies, you should not see insurance as a sunk cost whatsoever.

Being Prepared is Not Wasting Money

For one, it is vital that we can always be prepared for the worst-case scenario. For example, if you have insurance for your home, it can protect you from the huge costs of dealing with floods, fires, robberies, and other expensive issues. If you have life insurance, you know that you have some extra protection should something go wrong that would stop you from working or living life to the fullest quality.

That is why so many people look to be fully prepared for insurance provision. While the insurance premiums might seem like a lot, they are often easily affordable. This is especially true for policies such as bespoke life insurance.

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This particular form of insurance coverage has gained a lot of interest in recent weeks, months, and years. Especially in the rise of the COVID-19 pandemic, many are more invested in protecting their health than ever before. That is why many are now turning to solutions like life insurance. They want the extra peace of mind that, should anything go wrong, they are given the right kind of support to get back on their feet. Life insurance does not only cover death; it can also cover things like grievous, life-changing injuries, serious illness, and more.

That is not a waste of money. The cost of a life insurance premium can be very affordable. Across a year, it could cost you very little to run an insurance premium. Even having multiple insurance policies for your home, business, professional indemnity, life, and the car would not cost you as much as you think.

All it takes is one of those policies to be needed, even once, and it could easily save you the money of the entire year’s policies for every insurance type you hold.

Insurance Helps You to Save

While it always helps to be an optimist in life, you need to be more realistic if you wish to have better financial control. This means that no matter how new your home is or your car, no matter how healthy you are, and no matter how secure your income is, having support via insurance is always preferable. All it takes is one mistake, one piece of bad luck, or one piece of poor fortune with your health, and you could be looking at the life-changing costs involved.

Insurance Investment is Great for You and Your Family

Insurance can often feel like a pessimistic thing to invest in, spending money in the event of a potentially never-happening negative. Insurance, though, can give you more than peace of mind; it can give you protection from the worst-case scenarios in life.

I am an economist and the founder and owner of Finance Blog Zone

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