Insurance - Your Umbrella Against Risk
Insurance is your financial tool against risk. Risk can take many forms; it could be damage to your property or can be in the form of bodily harm to you or your family members. Risk can also arise in the form ill-health or death. Protection against risk is a safeguard to your financial health. Insurance helps you against the erosion of your savings in case of some calamity or accident. Here are some types of insurance policies that are available:
General insurance policies provide coverage against perils such as theft, fire, third party liability, etc. Additionally, health policies and motor vehicle insurance are also included in general insurance.
Life insurance covers risks related to your life. In case of death of the insured, the beneficiaries will get an amount of money for which the policy was taken out (called sum assured). Life insurance is a way of securing your family against risks related to loss of income in case of death.
Benefits Of Insurance:
Insurance policies can also give returns to the insured and can be used to plan for major life events like retirement, children’s education or marriage, wealth creation etc.
Risk-averse investors can use derivatives to transfer risk and thereby gain safety, while those investors who have a greater risk appetite can use derivatives to execute contrarian trades to increase profits.