What is insurance?

Are you going to be graduating from college soon? Or maybe out on your own? A lot of people throw around the word insurance, you see commercials for it on TV or maybe your employer even offers insurance plans. But what is it, really? And how do you use it? Here’s a quick rundown of how insurance works.

At its most basic level, insurance allows you to pay monthly payments (called premiums) for benefits that exist to help you cover the cost of an unexpected expense.

For example, car insurance exists so that, if you’re ever involved in an auto accident, you’re not stuck paying the cost to repair your car, the other person’s car and even any property that was damaged in the crash. You’ll make monthly payment on your auto insurance (usually averaging around $1,500/year) and in return, if you’re ever in an accident, your insurance company will pay the majority of the expenses. Keep in mind though, the worse your driving record, the more you’ll have to pay in auto insurance. So drive safe!

Similarly, many companies offer employee health insurance plans. If you’re on one, you’ll pay a monthly premium, usually taken out of your paycheck, and in return, you’ll get discounts on normal doctor visits and the insurance company will take on the lion share of the cost if you’re ever in the hospital for a more serious medical issue or something routine, but expensive, like the birth of a baby.

More complex types of insurance exist for more complex issues too, like life insurance or disability insurance. These types of insurance are for more dire situations. Heaven forbid you should ever be disabled or even killed as a result of an accident or injury, but if that were to ever happen disability and life insurance can make sure you and/or your family is taken care of even when you are not able to provide for them.

On top of all of the various types of insurance, there are varying amounts of coverage for each one. Add all of this stuff together and it can make the world of insurance a very overwhelming and intimidating thing. But that’s why we’re here, to help you on that journey.

Have you been thinking about getting insurance? Give us a call. One of our representatives would love to sit down and talk with you about what best fits your situation and your budget. We look forward to chatting with you soon!

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