We may have at one time ventured to ask ourselves “is insurance really necessary?” When you buy a car and are ready to take it on the road, you must take out a third party insurance policy where any pedestrian or person in another vehicle will be compensated if they are harmed by your vehicle. This is a minimum requirement of law and avoiding this may result in a jail sentence. In this case you don’t have a choice, and it’s about the safety of others’ lives. But when it comes to your car, your home, your life, do you really need insurance?

Life as we know is full of unseen tensions. The future is increasingly becoming hard to predict, even for the magic-ball lady. There are so many opportunities and at the same time, many cases of theft, violence, and natural destruction. You might be a proactive person by nature or make very good plans for the future but it’s hard to deal with everything life throws your way, on your own. In the event of chronic illness or a death in the family, having to worry about financial matters is the last thing you need. This is why, even though the chances for a serious injury/illness to occur to the average citizen may be low, it is best to consider the possibility and prepare for the aftermath of such a turn of events.

There are some who still consider insurance to be a scheme that takes more from you than it gives back. The absolute skeptics figure it to be nothing more than a scam, where you don’t get anything back, either because no damage occurs to what has been insured or because your claim is rejected for some reason. Others think, ‘no, this will never happen to me, so I don’t need this protection’. But, as statistics will confirm, insurance is the most reliable contingency plan for anybody, to this day.

If you have an expensive home (with heirlooms or other valuables), think how you will safeguard the home. Install a burglar alarm? Buy a couple of nasty Dobermans? Keep a secret vault? A determined intruder will somehow find a loophole. In such circumstances, it’s not only the valuables that are lost. Your hard work, confidence and good spirits go out the window too. If you are protected for the stolen items, you will not feel the loss so much everyday as you try to move on. In short, insurance comes not only in the form of monetary assistance; it’s an emotional support during a crisis. So in this example, a mid-net worth or high-net worth policy (home & content insurance) will have kept you afloat.

So to answer your questions, yes, you need insurance but the following questions are yours to answer:

1. What types of insurance will you need?
2. How much insurance will you need?
3. How will you get all of this coverage at the lowest possible cost?

These questions depend entirely on your circumstances, lifestyle and future plans. As long as you realize the value of insurance, the answers will not be too hard to figure out.