Cultivating Financial Well-being: Steps to Choose the Right Insurance

Bogotá — Cultivating financial well-being has essential steps that everyone in their daily lives can take if they set their mind to it. First, saving is key: the ideal would be to save 10% of income, but if you are not able to do so, setting aside what you can is useful to encourage the habit of saving.

The same goes for taking the step of growing savings through investment, and taking care of the way in which debt is managed, so that it does not affect your economy.

Today there are different types of insurance that provide coverage in case of unexpected events such as accidents, illnesses, loss of employment or property damage and the choice can be overwhelming for some people due to the large number of options available in the market.

For this reason, and with the purpose of continuing to promote the financial education of Colombians, here are some basic steps to choose the right insurance:

1. Understand the options: There are different types of insurance, the most common being:

• Life insurance: guarantees financial support to the beneficiaries in the event of the death of the person taking the insurance.
• Vehicle insurance: protects the means of transportation in the event of an accident and/or theft.
• Health insurance: guarantees payment for medical services.
• Home insurance: protects the house and can be complemented with protection of its contents.
• Travel insurance: offers coverage in case of unforeseen events when traveling.
• Pet insurance: covers veterinary expenses that may arise unexpectedly.
• Civil liability insurance: covers damages to third parties. For example, if you accidentally cause damage to a neighbor’s property, the insurance responds with the costs to compensate them.
• Business insurance: against damage or loss of the business, it protects the assets of entrepreneurs.

It is also important to consider other insurance, such as leasing, which protects the property put up for rent, or fraud insurance, which protects the policyholder against events such as theft, loss or qualified theft.

Finally, insurance associated with debts that avoid financial burdens in difficult times.

Identify needs: Evaluating needs and priorities is key. Asking yourself about your own future, or that of your children or your partner, considering whether you have assets, investments or businesses to protect, among others, helps to understand what type of insurance to take to guarantee financial support for the family and guarantees for assets. If the needs are several, they can be prioritized in a list to define which ones to cover first.

Define a budget: One of the The first key in personal finance is to create a budget. Ensure there is a category for insurance that It adjusts to the monthly income of the person, family or business and for this it is necessary to exercise control over expenses.

Quote and compare: After identifying what type of insurance is required and what the budget is, you must compare the offers on the market.

It is important to make a comparison between the rates, coverage and conditions, with the aim of acquiring the best option or even finding seasonal offers.

Seek expert advice: It is always a good idea to seek guidance from the hand from an insurance advisor who, with personalized attention, finds the best options according to each case.

Investing in insurance helps safeguard the family’s future, protects assets and is a fundamental element to protect oneself against illness, unemployment, fraud, accidents, damage, theft or setbacks.

“Learning how to insure yourself also plays a key role in the formula for financial well-being. Insurance is a key element in financial planning, as it guarantees the protection of assets and gives us guarantees in the event of unexpected situations,” says Cristina Arrastía, vice president of Business at Bancolombia.