Insurance Problems and the Economy
The very concept of insurance is getting a lot of trouble recently. What should be considered as a way to lower financial risk is ending up as the factor that increases it. And with the downhill economy that we are currently experiencing, insurance companies that are declaring bankruptcy is truly frightful for the people who have business with them.
So, what are the reasons for the distrust laid upon insurance companies? There are those who speculate that it is because of a company's direct refusal to hand over the insurance to someone who has a high likelihood of loss. Persons who do extreme contact sports, for example, may have trouble finding life insurance. If you are someone with a high-risk profile, then chances are good you won't get legally insured. To a lot of people, this seems to be contradictory to what insurance should be.
Now this brings us to the question: What is an insurance company supposed to be? Many people invest in insurance without even understanding how it'll affect one's finances. With anything that concerns money, blind investment is a serious risk.
At it's core, buying insurance is a confirmation of a definite loss of assets (in which case, the payment of a periodical premium) so that the risk of a larger, and more devastating loss is lessened. It must be accident; an insured person must not purposely cause anything that will harm him or herself. It's quite understandable that there are a number of scheming people out there who want to make a quick buck by deliberately hurting themselves for insurance money.
This is where problems come in. The concept of mitigating an accidental loss becomes an issue if the company suddenly declares bankruptcy. If so, you would definitely feel like you accepted a devastating loss without no compensation whatsoever. And this is what angers a lot of people. - 23212
So, what are the reasons for the distrust laid upon insurance companies? There are those who speculate that it is because of a company's direct refusal to hand over the insurance to someone who has a high likelihood of loss. Persons who do extreme contact sports, for example, may have trouble finding life insurance. If you are someone with a high-risk profile, then chances are good you won't get legally insured. To a lot of people, this seems to be contradictory to what insurance should be.
Now this brings us to the question: What is an insurance company supposed to be? Many people invest in insurance without even understanding how it'll affect one's finances. With anything that concerns money, blind investment is a serious risk.
At it's core, buying insurance is a confirmation of a definite loss of assets (in which case, the payment of a periodical premium) so that the risk of a larger, and more devastating loss is lessened. It must be accident; an insured person must not purposely cause anything that will harm him or herself. It's quite understandable that there are a number of scheming people out there who want to make a quick buck by deliberately hurting themselves for insurance money.
This is where problems come in. The concept of mitigating an accidental loss becomes an issue if the company suddenly declares bankruptcy. If so, you would definitely feel like you accepted a devastating loss without no compensation whatsoever. And this is what angers a lot of people. - 23212
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posted by X - Men @ 10:38 AM
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