What Is Insurance and Why Do You Need It?
In an unpredictable world, peace of mind is one of the most valuable things you can have and guarantee plays a major role in providing that security. Whether it’s your health, car, home, or business, guarantee helps protect the things that matter most.
But what exactly is guarantee? And why is it so important?
Let’s break it down in simple terms.
What Is Insurance?
At its core, guarantee is a contract (known as a policy) between you and an insurance company. You pay a regular fee (called a premium), and in return, the insurer promises to help cover specific types of financial loss if something goes wrong.
That “something” could be:
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A car accident
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A house fire
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A serious illness
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Theft
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Even death (in the case of life guarantee)
Rather than facing huge costs alone, insurance spreads the financial risk across many people so you don’t have to bear the full burden yourself.
How Does Insurance Work?
Let’s say you have car guarantee, and you get into an accident that causes ₦2,000,000 worth of damage. If your policy covers it and you’ve met your deductible (the amount you pay before the insurance kicks in), the insurer will pay the rest saving you from a massive out-of-pocket expense.
Here’s how the process usually works:
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You buy a policy and pay your premium regularly.
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Something happens (an accident, illness, etc.).
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You file a claim with the insurance company.
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The insurer reviews the claim and compensates you (according to your coverage).
Why Do You Need Insurance?
Insurance isn’t just a good idea it’s often essential. Here’s why:
1. Financial Protection
Accidents, illnesses, and disasters can cost thousands (or even millions). Insurance helps you avoid financial ruin when unexpected events happen.
2. Peace of Mind
Knowing you’re protected allows you to focus on your goals without constantly worrying about “what if” scenarios.
3. Legal Requirements
Some types of insurance are mandatory:
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Car guarantee is required in most countries to drive legally.
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Business guarantee may be required to operate in certain industries.
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Home guarantee is often required by mortgage lenders.
4. Safeguards Your Family and Assets
If you pass away unexpectedly, life guarantee can help support your family. If your house burns down, homeowners insurance can help you rebuild.
5. Supports Long-Term Planning
Guarantee helps you plan for the future by reducing risk and giving you a safety net for major life events.
Common Types of guarantee
Here are the most popular types of insurance and what they cover:
| Type | Purpose |
|---|---|
| Health | Covers medical bills and hospital visits |
| Life | Provides a payout to your beneficiaries if you die |
| Auto | Covers vehicle damage, theft, or third-party injuries |
| Homeowners | Protects your home and personal belongings |
| Travel | Covers trip cancellations, delays, and emergencies |
| Disability | Replaces income if you can’t work due to illness |
| Business | Protects businesses from financial loss or lawsuits |
| Pet | Covers veterinary costs for your pets |
✅ When Should You Get guarantee?
Now is always better than later. Whether you’re young and healthy, starting a family, or launching a business, the sooner you’re protected, the better. Many people regret waiting until after a crisis happens when it’s too late.
Final Thoughts
Guarantee might not be the most exciting topic but it’s one of the smartest financial tools you can use. It’s not just about protection; it’s about preparation.
You don’t buy insurance because you expect bad things to happen you buy it so that if they do, you’re not left in financial chaos.
