Insurance World

The idea behind insurance is to make sure that you are prepared for the direct and indirect expenses that an accident can cause you to incur. There are several types of insurance, and these days, it is possible to insure just about anything and buffer yourself from costs, income loss and even liability. However, one area that many people don’t take into consideration is properly insuring their children.

Many people with children just cannot entertain the thought that their child might some day be taken from them. However, this is a tragic part of life for some people, and it can be a devastating setback from more than an emotional standpoint.

It should not be thought morbid or tempting fate to take out a life insurance policy on your child. There are some schools of thought that tend to consider this sinister. As with any insurance policy, taking out an insurance policy on your child is simply preparing for a worst-case scenario. Losing a child can be crippling to parents and siblings, and can have a subsequent financial impact. Beyond covering any burial costs, it takes no imagination whatsoever to see that the loss of a child could be emotionally debilitating to the entire family.

Divorce and family dysfunction are alarmingly common after the loss of a child. A parent will want to give themselves the time needed to grieve. Insuring your child will help ensure that you will be able to afford the time off that you will need. In addition, such a loss may have an emotional impact felt deeply by a family and family dynamics often go into a spin. Parents may need grief counseling as well as professional help to deal with siblings or other family members impacted by the loss. Family counseling is often recommended by clergy and clinical professionals.

This is the thought process behind a life insurance policy that is taken out on a child. You can ensure that in the aftermath of an unthinkable loss, the financial impacts, temporary earnings loss and professional counseling needed are not additional stresses that prevent you and your family from healing, and even worse can tear it apart. If you have children, this is something that you will want to take into account.

Copyright 2006 Karl Stadler

Now why in the world do we need insurance?

Back in the good old days when the earth was still flat and we were all living in the same time zone you would have had little knowledge of insurance except for maybe leaving something as insurance for a loan you made. There is nothing wrong with the concept of insurance, it most certainly has its value in the bigger picture of things.

What is wrong is the way in which many people are bulldozed into signing for insurance policies that they don’t really need or which will not be able to tend their needs once they need it.

As there are many first-class insurance companies out there, there are also the few that are just out to make a quick buck from you creating never ending problems.

Many people spend a large portion of their income on insurance, health, car, household and life to name but a few. There are many others policies that the insurance companies have invented to tend for other events that might occur.

All insurance is hedged against a bet. Unmistakably based on our inherent fear, which is also the sales mechanism for selling insurance.

There is always a fear of the unknown, there where you have not been and for that matter don’t want to go to either. The insurance agent will take you there and explain what it is like and make the fear almost unbearable.

Picture this scenario, you and your wife are sitting in the dining room and directly opposite you is the insurance agent. He is sitting forward and telling you the story of this unfortunate family who failed to take out insurance the day he was there and before they could sign the contracts the unthinkable happened, and now they are stranded with nowhere to go.

You don’t want this to happen to you. This is followed by one or two stories of people, and there are pictures to prove this, who did take out insurance in the nick of time. Your heart goes out to that poor family who now face hardship and turmoil and you are glad for the other families who are now able to make it and move on.

The picture painted in your mind plays with your fear of not knowing what will happen tomorrow and you certainly don’t want something like that happening to you without being prepared.

The agent explains all the benefits you will have if you take out this policy now, and in light of what you have just heard and witnessed with pictures, it not only seems like a good idea, it is an absolute necessity.

The insurance agent then looks at you and your wife waiting for an answer, he does not speak and there is an odd silence. You ask about one or two points, he explains each one perfectly and asks if you have any further questions. You answer no, simply because you actually don’t know any better. He hands you the contract and a pen.

This is nothing more than pure sales, the pitch, overcoming objections and closing the sale.

Yes you can cancel the contract later but this process will probably end up taking an entire day of your time and endless irritation.

The strange thing though is that you are the one betting that something will happen to you, you believe it. The insurance company on the other hand are betting that it will not happen.

This is quite logical if you think of it, how otherwise would the insurance company make a profit? Whether you believe it or not, they are in business to make a profit, as is any other business. So there is nothing wrong with it.

Where you need to be careful however is buying your insurance with emotion. Now this is a contradiction in terms because all purchases are made based on emotion, you might think there is logic involved, but it is a very tiny percentage.

Never sign immediately, take a day or so to review and let your emotions settle, then make the final decision. Also give yourself time to go through the written material, the fine print, very fine print and very very fine print.

It is a major pain in the you know where, but it will give you a good indication of what you will not be getting. Speak to the agent again and clarify all the points you are uncomfortable with and make sure that the policy you are considering is made for you.

Remember fear of the unknown is your biggest enemy. You will not conquer that fear but take time to make you decisions carefully when buying insurance of any kind and don’t get bulldozed into signing a contract that will end up being of no or little value the day you really need it to come through.