Buying insurance is not always an easy decision. Some insurance is necessary or a legal requirement, but many types of insurance are not. It can be hard to know whether it is always worth buying it. Below is a checklist of things to consider when you are making up your mind.
What are the consequences of not having the insurance?
It can be easy to see insurance just as a financial drain; money that you pay out each month which you are unlikely to see again. However, it is worth thinking about what would happen if you did not have that insurance. For example, if you do not insure your possessions and they get stolen then you will have to find the money to replace then, if you do not have vets insurance and your pet is ill you will have to pay. It is worth finding out exactly what the cost of having the insurance in, under what circumstances you will be able to make a claim and how much you can claim and how much it would be to pay those things if you were not insured.
Will it provide good value for money?
Consider how much you will be paying in and how that compares to what you would have to pay should you not have the insurance to claim on. For example, consider if you have dental insurance. If you only have check-ups and never need treatment, then it is unlikely that insurance would be worthwhile. However if you have a lot of treatment, it may not only be cheaper to have insurance, but it could help you to spread the cost of that treatment by paying it monthly rather than all in one go.
Will it provide peace of mind?
Insurance can often give people peace of mind. They will know that if there is some sort of emergency then they will get the money to help them. This could be something which helps them to know that they will always have help in an emergency situation. It could be possible that without the insurance, they will be worried that they may lose possession or not be able to afford treatments that they need and this could be a big cause of stress.
Could you make better use of the money?
It is worth considering what you would otherwise do with the money if you were not paying the insurance policy. Could you be saving up it up perhaps and find that soon enough you have enough money to cover any pay-outs you would be getting form the insurance. You might invest it or spend it on necessities. Consider where you think the money might be best spent, think about all of your options and the consequences of those options.
Are you acting within the law?
Some insurance is required by law, particularly for vehicles, property which have mortgages and businesses. It is very important to make sure that you have all of the insurance required and do not cancel them. If they are very expensive then you may be able to find cheaper if you look at different providers. It is worth checking every year to see whether you can find something cheaper.