A Discussion on "Insurance" and its meaning

MR. WATSON: Most new life insurance policies are purchased by individuals through life insurance agents.

MR. WATSON:   So what is insurance? Tell me what you think it is.

STUDENT: Safety net.

MR. WATSON: What the heck is that, a safety net?

STUDENT: Like a "holy smokes" fund.

MR. WATSON: Well, there you go. What else might it be, guys?

STUDENT: Risk management.

MR. WATSON: Risk management. The girl's been reading an advanced financial planning book. What else is insurance? Tell me what you think it is. There is no right answer, no wrong answer.

STUDENT: Protection.

MR. WATSON: Protection. Anybody have insurance? Who has insurance, raise your hands. Do you feel protected?

STUDENTS: No.

MR. WATSON: But that's what textbooks say, isn't it? They say insurance is protection. What else is it? Have you heard insurance is peace of mind? Security? Have you heard that? Do you have insurance?

WOMAN: Yes.

MR. WATSON: You have peace of mind?

WOMAN: Occasionally.

MR. WATSON: Who is married with children? Raise your hands.

MR. WATSON: Now, if one of the spouses were to die, if one of the parents were to die, that income stream has been cut off. What is it the spouse needs?

STUDENT: Life insurance. Money. Cash.

MR. WATSON: We can't stop death or sickness or disabilities from occurring but we can prevent the problems that death, or sickness or disability brings. Insurance provides financial security. We can't prevent the loss of the bread-winner, but we can prevent the loss of income the bread-winner was providing.

MR. WATSON: Nobody likes spending hard earned dollars on insurance. But, folks do spend those hard earned dollars on insurance to protect themselves or those they love.

MR. WATSON: Insurance . Insurance is just replacing financial uncertainty with certainty.