Understanding Insurance

In today's fast paced, technology driven and increasingly commercial world we are expected to 'get with the program', as it were, and become instantly familiar with all the new products available on the market and the jargon that goes with it.

For some this is a simple matter, but for others it means sometimes having to ask seemingly obvious and therefore embarrassing questions.  The same here can be said of understanding insurance, and the various insurance packages and options available.

We all have some kind of idea about the purposes of insurance, that is, we understand that by ascribing to a particular insurance package we can financially protect ourselves and our possessions, but not everyone is fully aware of what this actually entails, what insurance packages are ultimately available and where you can go to get 'protected'.

At the end of the day, though, understanding insurance is not as difficult as it may initially seem, for all it really boils down to is an understanding of your own needs, and assessing the risk factors in your own life.

For instance, then, have you recently bought a new house, car, computer or any other possession you believe to have value and now have nightmares about it either being broken into, stolen, or damaged?  Have you started wondering what would happen to your spouse and children if you had to suddenly be diagnosed with a dreaded disease, become disabled through an accident or worse?  Are you planning a family or even a solo holiday around the country or overseas and are afraid of what might happen in you were injured or lost your luggage en route?  Are you starting up your own business and would like to secure financial support for you business assets?

If you can answer yes to any of these questions, then you are well on your way to understanding insurance and what it can do for you, for these are the basic assessments you would need to make when deciding on which insurance package is best suited to your current needs.

The next step in understanding insurance is to select the specific insurance company with which you would like to insure, and the specific package tailored to suit your own budget.  With this in mind it is helpful to know that South African insurance companies usually fall into two categories.  Firstly, general insurance providers, like OUTsurance and SANTAM among others, who offer coverage for a wide range of insurance needs, including motor, household and business.

Secondly, there are the specific insurance providers, like 1st for Women and Sanlam, again among others, who offer more specialised insurance options, covering either one or two insurance market areas, usually for a specific target market.

Ultimately, though, the key to understanding insurance lies in the realisation you need not be afraid of doing research, of comparing the various packages offered by South African companies and assessing how much you can afford in the way of insurance premiums before ultimately making a final decision.

Insurance allows you to practically prepare for those situations where financial support is most needed, and so you need to be just as adequately prepared to be able to make the best possible insurance choice.