The very concept of insurance is getting a lot of trouble recently. What should be considered as a way to lower financial risk is ending up as the factor that increases it. And with the downhill economy that we are currently experiencing, insurance companies that are declaring bankruptcy is truly frightful for the people who have business with them.
But why the distrust with insurance companies these days? There are speculations that it's because of a company's direct refusal to insure a person with a high likelihood of loss. For example, someone who engages in extreme or contact sports will have a low chance of getting life insurance. If you're someone with a high-risk profile, you may have problems getting legally insured. To a lot of people, this is the exact opposite of what insurance is.
Which brings us to the question: What, then, is insurance supposed to be? There are a lot of people who invest in insurance without completely understanding how investing in it will affect our finances. If it concerns our money, a blind investment will put us at risk.
At it's core, buying insurance is a confirmation of a definite loss of assets (in which case, the payment of a periodical premium) so that the risk of a larger, and more devastating loss is lessened. It must be accident; an insured person must not purposely cause anything that will harm him or herself. It's quite understandable that there are a number of scheming people out there who want to make a quick buck by deliberately hurting themselves for insurance money.
This is where problems come in. The concept of mitigating an accidental loss becomes an issue if the company suddenly declares bankruptcy. If so, you would definitely feel like you accepted a devastating loss without no compensation whatsoever. And this is what angers a lot of people. - 23217
But why the distrust with insurance companies these days? There are speculations that it's because of a company's direct refusal to insure a person with a high likelihood of loss. For example, someone who engages in extreme or contact sports will have a low chance of getting life insurance. If you're someone with a high-risk profile, you may have problems getting legally insured. To a lot of people, this is the exact opposite of what insurance is.
Which brings us to the question: What, then, is insurance supposed to be? There are a lot of people who invest in insurance without completely understanding how investing in it will affect our finances. If it concerns our money, a blind investment will put us at risk.
At it's core, buying insurance is a confirmation of a definite loss of assets (in which case, the payment of a periodical premium) so that the risk of a larger, and more devastating loss is lessened. It must be accident; an insured person must not purposely cause anything that will harm him or herself. It's quite understandable that there are a number of scheming people out there who want to make a quick buck by deliberately hurting themselves for insurance money.
This is where problems come in. The concept of mitigating an accidental loss becomes an issue if the company suddenly declares bankruptcy. If so, you would definitely feel like you accepted a devastating loss without no compensation whatsoever. And this is what angers a lot of people. - 23217
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