Which types of insurance really make sense?

Which types of insurance really make sense?

Life always involves risks

As human beings we are always exposed to different risks. The insurance industry is also aware of this fact. When assessing different risks, insurers use a so-called decision theory and use this to derive the probability of such negative events occurring. The occurrence of such a negative event can be very painful for our lives and, in the worst case, even threaten our own livelihood or that of family members. One term life insurance for example, provides family members with at least financial security in the event of their own death. A great relief for coping with grief if at least one’s livelihood is secured. But it doesn’t always have to be the whole thing. There is a whole range of insurance policies, some of which are mandatory, some of which are absolutely necessary and some of which are superfluous.

Which types of insurance actually make sense?

There are a number of major risks that can completely shake or even destroy your own existence. These include serious illnesses, a permanent loss of income or any liability claims that may arise. Therefore, there are at least three types of insurance that you should definitely have in order to protect yourself as best as possible against an impending financial crash. However, there are other types of insurance that can make sense depending on your personal life situation. For example, professional liability insurance can be very important in addition to private liability insurance if you run a business. As an employee, on the other hand, you do not normally need such professional liability insurance.

The health insurance

Every German citizen is obliged to take out health insurance. Because this covers the costs for medical treatments, check-ups or even necessary medical operations. The scope of the services depends on the respective health insurance companies and policies. Basically there is in Germany, but in addition to the legal Health insurance as well as private health insurance. However, this is only available for certain groups. The self-employed, civil servants or employees who exceed certain income limits have the option of taking out comprehensive private health insurance. If, on the other hand, you have statutory health insurance, you should definitely think about supplementary health insurance with a private insurer. The additional services can close the ever-growing gaps in statutory health insurance.

The personal liability insurance

If you harm another person, you have to pay the full amount for the corresponding damage with your own assets. Liability for such damage is generally not limited and, depending on the damage event, can become really expensive and life-threatening. For this reason, every person should take out private liability insurance, even if it is not mandatory. A corresponding policy covers a whole range of risks that were triggered unintentionally. If this is just the neighbor’s bike, then you would probably be able to bear the cost yourself. However, if a permanent pension payment to the injured party is required after an accident for which you are at fault, this quickly exceeds your own financial possibilities.

disability insurance

As already mentioned, health insurance is mandatory and most people understand the meaning of private liability insurance. No less important is actually a so-called disability insurance. Because if income is completely lost due to an accident or illness, the entire existence of a family is threatened very quickly. There is a statutory disability pension that is intended for such situations, but in many cases does not bring the hoped-for benefits.

The term life insurance

In addition to the mandatory insurance and the policies that should not be waived under any circumstances, we would like to take a closer look at term life insurance at this point. As reported at the beginning, this policy forms the financial security for the relatives in the event of death. For example, imagine a family in which the main breadwinner is eliminated. Installments for real estate or cars that can suddenly no longer be serviced can quickly lead to having to give up the usual living conditions. In the mourning phase, this would be fatal. Therefore, the advantages of term life insurance are obvious: the grieving relatives are at least not burdened with existential worries. Term life insurance is also suitable for single people. For example, to secure a loan or a company. The conclusion of such a policy is very simple. Depending on the provider, the monthly contributions start at less than 5 EUR. Depending on the contribution amount, there are then payment amounts that are paid out under previously agreed conditions if the worst comes to the worst.

Photo credit: REDPIXEL / stock.adobe.com

PS: Quality management is important to us!

Please let us know how you like our post. To do this, click on the asterisks shown below (5 asterisks = very good):

PPS: Did you particularly like the post?

Support our advice portal: