Why the poor needs insurance most?

Several times it has become issue of argument as to who needs insurance protection most. Is it the poor or the rich?. The truth is that everybody needs insurance, but the poor needs it most.

A rich man that has plenty of cars in his garage may not feel it so much when one of them is stolen and he can afford to buy another one to replace it without sleepless night.

This is not the same with the poor or one that is managing. If the wind blows of the roof of the poor man’s house, he may not be able to replace it unless people come to his rescue. If his only car is stolen, he may not be able to buy another one in the next six months.

With these, it becomes clearer that the poor who may not have a reserve cash to replace lost assets when it happens truly needs insurance protection most.

Experts say insurance is for everyone as longer as you have dependants, meaning that whether you are rich or poor, and as longer as you will not be there at a certain time to provide for your dependants, then you need insurance.

So, one way or the other, we all need life insurance for either our self or for our dependants.

So the first assessment test to actually know where you belong in this divide is to do a risk profile of yourself and your family, and this can be better done with the help of a personal finance consultant.

It is also called health check in insurance, and this enables you ascertain once risk profile and what possible insurance products will suit the situation. 

According to experts, the important thing is to first determine whether you need life insurance, which kind is best for you and carefully calculate how much you need.

If you have dependents to protect and don’t have enough savings, you definitely need insurance. Then if you want to protect your family against the destruction of your business or estate after your death, whole life or universal life insurance has to be considered.  But if your main concern is to protect your family against a loss of your income, term insurance is the way to go.

Life insurance is designed to protect your family and other people who may depend on you for financial support. If you die and lose your income, the people that are dependent on your financial support will lose that income, so life insurance can help cover some or all of that loss depending on the policy you choose. But there are instances where life insurance can be beneficial even if you have no dependents, such as your desire to cover your own funeral expenses. Here are some guidelines to help you decide if life insurance is the right choice for you: