Sita Sheena Sdn. Bhd.

Insurance Agents, Consultation & Services @ Petaling Jaya

A Bet Against Uncertainty

                                             Whether ’tis nobler in the mind to suffer
                                             The slings and arrows of outrageous fortune,
                                             Or to take up arms against a sea of troubles,
                                             And by opposing end them.

                                                        Hamlet Act 3, Scene 1: William Shakespeare

When the law, or a contract, compels us to buy
insurance, we have no choice about it, we just go
along. But did you know that insurance is actually
a smart bet against the uncertainties of life?

                                   A simple way to understand the usefulness of
                                   insurance is to consider this question:-

                                   Which risk option would you choose between
                                   the following 2 options? (choosing one will
                                   exclude the other):-

                                   The certainty of a very small loss now, which
                                   you can afford to pay

                                   The uncertainty of a very big loss in the future
                                   which, if it happens, might cause serious financial
                                   hardship, or even bankruptcy

If you want to “win” your bet, you have to be
unlucky enough to suffer a crisis first! If you
are lucky enough not to suffer a crisis, you
“lose” your bet! If you don’t bet at all, you
may save a little if you don’t encounter any
crisis, but if you have a major crisis, you could
get “wiped”. That is the “worst case” scenario.
Those are the strange paradoxes of insurance!
Facebook CEO, Mark Zuckerberg, said “the
biggest risk is not to take any risk”. Many
others have said something similar. (For
example, Shakespeare, in the quote above.)

                                   Doing nothing can be a big risk. By taking the
                                   right action, one can reduce significantly the risks
                                   of inaction.  In insurance the willingness to pay a
                                   small cost now(i.e.the premium) can free you
                                   from carrying big ticket expenses later, (as might
                                   be triggered by some adverse event in your life, or
                                   business), which, without insurance, could leave
                                   you broke or ruined.
Insurance helps you to
                          manage and survive crisis. It is a true friend
                          at the time of need.

Life without insurance could be a high stakes gamble!

Thanks for reading and sharing.

• Risk and Insurance


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s