Insurance Basics
For many people, insurance is an unknown and distant terrain and they do not take into account that they are very useful tools when it comes to protecting the most valuable possessions, such as health and life. However, the topic of insurance is much easier than it seems. Through a review of the basic concepts, you can know yourself better and make decisions.
To begin with, what is insurance?
Insurance can be defined as financial tools that allow you to financially protect everything from belongings to life and health. Technically, they are contracts through which, in exchange for collecting a premium, the insurance company undertakes to compensate for the damage caused or pay capital or income in the event of an accident. Before hiring one, it is advisable to know what types exist and what they mean for personal finances.
When taking out insurance, you must guarantee that you will receive compensation in the event of an emergency, such as a car accident, a natural disaster, some types of illnesses, theft, etc.
According to the results of the 2018 National Financial Inclusion Survey (ENIF) carried out by the National Institute of Statistics and Geography, only 25% of Mexicans between 18 and 70 years of age have insurance of some type that helps them. overcome any unforeseen event or emergency.
What types of insurance exist?
There are three types of insurance, according to their usefulness:
- Personal insurance: These include life, personal accident and health insurance. With them you can protect the person and the family.
- Property insurance: These are car insurance, home insurance, civil liability insurance, among others. With them, belongings and assets can be protected, and they can even save money in the event of an accident.
- Service provision insurance: These are those that cover the insured during trips, provide legal assistance or during a death.
In all cases, insurance helps you react in the best way to an emergency, so that unexpected expenses can be covered without having to go into debt or disburse a large amount of money at once.
How do they work?
After taking out insurance, the insured pays an amount periodically. This is known as a premium. The frequency with which this premium must be paid depends on what is agreed with the insurer.
All insurance has coverage, and this concept refers to the insurer's commitment to compensate in the event of an accident or event. When contracting insurance, the specific coverage it contemplates must be taken into account. In all cases, the insurance coverage can be adjusted to have more or less protection.
All details of insurance coverage and other conditions are set out in a policy, which is a legal contract between the insured and the insurance company, which establishes the rights and obligations of both parties.
Contrary to popular belief, insurance is easy to use and it is not necessary to pay a lot of money to have support of this type. BBVA Seguros has different options to protect what matters most in any adverse moment.
What is savings and how to save better at all stages of life?
Saving is reserving part of current income to ensure the future. It implies, therefore, prioritizing this 'future self' over the 'present self', an exercise that is not easy for our brain.
To save, experts advise good planning, getting good advice and being aware that income and expenses vary at different stages of life. Becoming aware of the importance of savings is essential to having good financial health.
Types of savings
There are different ways to save, as well as various financial instruments designed to encourage savings that are intended to increase.
The savings can be classified into:
- Private savings: This is carried out by private organizations that do not belong to the State. This group includes families, non-profit institutions and companies.The savings of a private company are equivalent to its profit minus the part it distributes among its owners or shareholders in the form of dividends or participation in profits.
- Public savings: It is carried out by the State, which receives income through taxes and other activities, while spending on social investment, infrastructure (roads, bridges, schools, hospitals, for example), education or justice, among others. other games. If a State manages to save it means that its income is greater than its expenses and it presents a fiscal surplus; The opposite case supposes a fiscal deficit.