The Trouble with Insurance in This Economy
The concept of insurance is getting a lot of mishaps in recent news. Something that is normally considered as a way to lessen financial risk is now ending up a factor that actually increases it. Nowadays, with the downhill trend of economy that we are currently facing, insurance companies that declare bankruptcy is a frightening prospect for a lot of people who have done business with them.
So, what are the reasons for the distrust laid upon insurance companies? There are those who speculate that it is because of a company's direct refusal to hand over the insurance to someone who has a high likelihood of loss. Persons who do extreme contact sports, for example, may have trouble finding life insurance. If you are someone with a high-risk profile, then chances are good you won't get legally insured. To a lot of people, this seems to be contradictory to what insurance should be.
Which leads us to the question: What is insurance supposed to be? Many of us invest in insurance without completely understanding how this affects our finances. In anything concerning money, a blind investment puts it in serious 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.
Now, this is where potential problems enter. The idea of compensating a loss becomes a problem if the insurance company suddenly goes bankrupt. If that happens, you would just feel like you accepted a loss without gaining anything whatsoever. This, it seems, is what puts off a lot of people. - 23159
So, what are the reasons for the distrust laid upon insurance companies? There are those who speculate that it is because of a company's direct refusal to hand over the insurance to someone who has a high likelihood of loss. Persons who do extreme contact sports, for example, may have trouble finding life insurance. If you are someone with a high-risk profile, then chances are good you won't get legally insured. To a lot of people, this seems to be contradictory to what insurance should be.
Which leads us to the question: What is insurance supposed to be? Many of us invest in insurance without completely understanding how this affects our finances. In anything concerning money, a blind investment puts it in serious 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.
Now, this is where potential problems enter. The idea of compensating a loss becomes a problem if the insurance company suddenly goes bankrupt. If that happens, you would just feel like you accepted a loss without gaining anything whatsoever. This, it seems, is what puts off a lot of people. - 23159
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posted by X - Men @ 1:02 AM
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