Value of Insurance:  

The value of insurance builds the cash value of the investment portion of the Insurance Policy worth. The insurance companies puts some of the money you pay as the premiums into various types of investments, with the expectation that they will gain profit and value.   Insurance agents and brokers cannot promise to make the clients rich claiming that the clients’ lives and business are more efficient. 

Your chances of standing financially stable is diminished if a significant loss occurs. The value of Insurance is to provide peace of mind up to a point. Where you own a small retail business, retaining the majority of your insurable losses through deductibles and self-insured retention. What if the risks in the Commercial markets are not insured? No one can transfer the risks from one person to the other’s balance sheet. So thus this leaves us with catastrophic risk insurance and reinsurance are perfectly suited. 

Without insurance and risk management the world’s economies would grind to halt. Business has a greater value only in terms of macro sense. It’s a different story where the rubber meets the road. Most the insurance transaction agents compete against one another to see how low they can drive the premiums but remember you get what you pay for. So always make sure you have the right price with the right coverage.

Problems with the Comparison

Problem with the Comparison is that people do not think of insurance and risk mitigation services as they do about other goods and services. They pre-assume that regardless of the cost their right is to get the same amount or the quality of insurance limits and coverage. Whatsoever competing programs must be compared on an Apple-to-Apples basis. 

Think twice about it. To make an Apple-to-apples comparison, the competing products must be identical. But never the premium. The value of goods or services generally often bear little relation to its cost and most of the people think it’s fine. Well there are usual small variations in price among identical items. If an item is on sale or if the demand is greater than the supply, pricing differences do exist. But nothing comes close to the insurance industry in this regard. 

All cars begin depreciating from the time you start driving it so standard insurance companies places you car accordingly. They adjust your payout on the actual cash value of the car on the day of the accident, instead of what you originally paid. 

Insurance value also differ depending on the coverage that reflects an amount that is stated at the onset of the policy. You tell your insurer what your car is worth and its insured for that amount but the insurance company can choose to pay you either the stated value or the actual cash value. 

Acknowledge the value

Anyone can argue that insurance product has very little intrinsic value but only the wise realizes that its an undifferentiated commodity: deriving its value solely from its cost, in other words the value of the product has an inverse relationship it its cost and this dynamic persists even after a loss.  In most cases in a well developed brand companies, the price of the item is usually not negotiable because the value of the item is generally thought to be reflected in the price. Value can be expressed in many ways but true insurance value occurs in terms of a loss. 

The value and cost in the insurance business is directly related to the perception of what is being bought or sold. It doesn’t mean to expect individual insurance buyers to consider the macro benefits that insurance provides to the society because to them it’s just a necessary evil. Insurance buyers think insurance companies are smart evil taking all their money but what they don’t realize is that in case that individual gets into loss, insurance kicks in to let him stay in peace. 

Reflecting the clients attitudes and misconceptions, agents and brokers does not defend the efficacy and the value of the insurance. You can not make many sales if you disagree with your clients belief systems. Many people also think that insurance is a necessary even that you are required by the government. 

Conclusion 

Value of Insurance is the model for transferring and managing risk from individuals to insurance industry. If the selling agents and brokers take some extra opportunity to defend the purpose of the insurance shall make the change on the clients perceptions.