Have you ever wondered what grown-ups do to protect important things, like their homes, cars, or even their own health from bad things that they didn’t plan that could happen? Sometimes, bad things happen like fires, accidents, illness or even theft, so what can we do to protect ourselves from the loss we could suffer if such bad things happen? This is where insurance comes in! Insurance is a special way to keep our valuable stuff safe, just like how a superhero protects people from bad guys in the movies. Let's find out more about insurance.
What is Insurance?
Insurance is an agreement, like a promise, between you and an insurance company. The insurance company says, "If anything bad happens to the things you love, we'll help you fix it or get a new one." It's like having a really powerful friend who's got your back!
Why is Insurance Important?
Imagine if you accidentally broke your friend's favourite toy, or your bicycle got stolen. It would be great to have some help to replace them, right? That's exactly what insurance is for! It helps us during difficult times and makes things easier to handle. So, instead of waiting to get money to replace what was damaged or lost, insurance will step in and give you a replacement or the money to buy a new one.
How Does Insurance Work?
When grown-ups want to protect something important, like a house or a car, they pay a little bit of money to the insurance company every month. This money is called a "premium." It's like putting some of your allowance into an old milk container for a rainy day.
Now, let's say something bad happens to your house or car. The insurance company will give you money to fix the problem or get a new one. This is called a "claim." The insurance company helps you in your time of need because you've been paying them those small premiums all along.
What Kinds of Insurance Are There?
There are lots of different types of insurance. Some of the most common ones are:
1. Health Insurance: This helps when you're sick and need to visit a doctor or hospital.
2. Car Insurance: This takes care of any problems with a car, like accidents or repairs.
3. Home Insurance: It protects your house and the things inside it from bad weather, fires, or other accidents.
4. Life Insurance: This helps your loved ones if something were to happen to you.
Insurance is a smart way for grown-ups to keep their important things safe, just like how superheroes protect people in the movies, comics and cartoons. The difference is that insurance is real, and superheroes in movies are make believe. The next time you hear about insurance, remember that it's all about making sure we're ready for any challenges life might throw our way, and it is the right thing to do. We have an amazing story called “The Karierens Dilemma” that teaches children your age about insurance. If you would like to read that story, please ask your parents to reach out to us.
To learn more about these and other life skills, please click the link below to get a FREE copy of our storybook "Birthday Savings for Omo" and learn more about other amazing storybooks and games you will enjoy.
This is a much needed lesson even for adults.