Insurance is a term people often use but not one they always understand. For customers,
insurance companies offer a contract (known as a policy) whereby an individual or corporation
receives a promise of reimbursement against possible losses in exchange for a premium.
Insurance companies pool risk this way; that means that, in the event an insurance company has
to pay out a claim, the company is still bringing in revenue.¹
There are several types of insurance. Some of them—like life insurance—are straightforward.
Yet, even in life insurance, there are many things to consider, like term vs. whole life. Other
types of insurance, such as fixed indexed annuity contracts, might require even more
explanation. You can buy insurance for your car, home, boat, or business. You can also buy
insurance for things like needing long-term care in retirement, liability insurance for your
business, disability insurance for your profession, and Medicare gap coverage.
People often talk about insurance as “protection,” but it’s really a form of risk mitigation. It
ensures that, no matter what twists and turns come with life, clients don’t face their risks flat-
footed. Nothing can protect you from risk. However, with a thoughtful, proactive, and detailed
insurance plan (as part of a comprehensive financial plan), you may find yourself with more
options than you would have had without insurance
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¹ “Insurance: The Complete Guide,” Investopedia, accessed February 27, 2020,