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Chuks Udo Okonta
Of all the insurance products, the only product you should not dare to have is self insurance.
What Is Self-Insurance? Self-insurance involves setting aside your own money to pay for a possible loss instead of purchasing insurance and expecting an insurance company to reimburse you.
Dangers of self insurance
*Negative impact on savings
Funding your risks alone, would definitely create a hole in your savings. One of the unique features of insurance is that you pay little premium to get large coverage, but in self insurance you pay heavily through your savings to cater for your risks.
*Panalties
Failure to buy compulsory insurances would attract panalties from the government.
*Financial risk
Self insurance can lead to huge financial risks when mishap above your capacity occurs.
*Funding challenge
Owing to numerous needs, it is often difficult to set aside adequate fund to cater for risks around us.
*Total loss
Your inability to recover a lost assets can lead to total loss of the asset.
*Bankruptcy
Self insurance can lead to bankruptcy if one is not able to rebound after suffering a risk.
*Poverty
Loosing assets that generate funds which keep you out of poverty, can drag you into poverty if there is no means to recover from the loss.
No insurer sells self insurance product, hence don’t seek or own it for it is an illegitimate product and dangerous.
