Risk management is the basis of insurance. Fear of the uncertain future creates the need for financial protection against a catastrophe. However, I recently stumbled on an article that provides reasons why some insurance are unnecessary. I kind of agree on the some of the points made:
1. Mortgage Insurance
Instead of focusing on just paying off the mortgage, wholistic coverage should be considered. In addition, most companys provide large sum discounts. There are term plans that mirror the mortgage insurance coverage, providing reducing coverage without needing you to submit mortgage documents and revising everything when you change residence.
2. Comprehensive Motor Insurance
Most drivers opt for low excess and a comprehensive plan instead of third party plan with higher excess. With the raising cost of motor insurance premiums, it is to your benefit to do some calculation if it is worth paying both an arm and a leg for ......
Hi,
No opinion is right or wrong.
Insurance is a financial solution to a risk management problem.
As financial planners, the client gets to decide what sort of risk management impacts them financially. Hence my opinion is that we let the clients decide if a paricular insurance is necessary. The above just forms part of my opinion.
Hi,
Finally it is clients choice but I believe it is important to provide a professional opinion if a particular insurance is unnecessary.
In this case, I would expect the financial planner to give me an absolute full picture, explain every single type of insurance under the sun to me in detail before I make a decision. Not disclosing a particular insurance means the financial planner deems it unnecessary and is depriving me a choice, since he is not providing any value add in shortlisting for me in his professional capacity.