Why do people buy insurance?

To me, insurance is the most powerful financial tool that people ever created.

Without insurance, life is much harder than you think. It's just that many people never think about it, don't want to think about it or they are being ignorant.

Tell me, which other financial instruments can give you let say $1 million for just $500? the answer is none. Only insurance can. That is what I paid for a life and disability coverage.

So here are a few reasons why people buy insurance:
1. It's simply leveraging your money. Like the example above, I only pay $500 and I got $1 million coverage in return. If you put that $500 in the bank, it will remain $500 and if something happens, you only get $500.

2. People know unfortunate things can happen to anyone, anywhere and anytime. Death, disability, critical illness, sickness and accident does not discriminate anyone. It does not matter if you are young or old, healthy or not, rich or poor, it can struck anyone randomly.

3. It's because they love themselves and the people around them. Not many people have millions of dollars in the bank when they just started their life. That is why insurance can give them the huge protection they need. So that if something happens, they will not become a burden, especially financial burden to their loved ones.

4. Peace of mind. Knowing that you are adequately covered will make your life better. You can live your life everyday without worry because you know that the financial future of your self and your family are secured. You don't have to worry about hospital bills if you are sick. You don't have to worry if you can't work because of disability or critical illness. You don't have to worry about your spouse and kids future if you are not around anymore.

So now you know why people plan. Have you plan for your self and your loved ones?

Cheers! Have a great day.