Some people go to extreme lengths in the pursuit of what they believe is preparation to survive whatever may come. While it is all well and good to be ready for whatever life may throw at you, there is a cost to too much preparation. Spending your life and your wealth staving off the theoretical risks of low probability events is not only a paranoid way to live, but an economically poor decision on balance. (For more on how disasters can affect your financial health, check out The Financial Effects Of A Natural Disaster.)
Over-Insurance
Insurance is a very necessary thing, but some take it too far. While travel insurance, life insurance for children, or cancer insurance might sound like reasonable ideas for some people, the cost and the "fine print" of these policies often makes them nearly worthless. Some people believe there is security in over-insuring items (or people) well beyond their worth, but this extra insurance is often quite expensive and the policyholder could do better by investing/saving the money to cover such a possibility.
To read the complete column, please click below:
http://financialedge.investopedia.com/financial-edge/0711/Are-You-Overplanning-For-A-Disaster.aspx
No comments:
Post a Comment