Despite the misconceptions surrounding the term insurance these days, insurance is primarily a financial tool used to accomplish a few things which we will get into in a minute. These days insurance, due to the recent health care debates, is used incorrectly. Health insurance is more used to mean health coverage, where insurance means something much differently.
Insurance is a financial tool. It is used to accomplish the following:
- Mitigate Risk - By paying an insurer, you are offloading risk onto the insurer. You essentially pay a little on a regular basis to mitigate the risk of a major expense down the road
- Protect Your Assets - Your assets might mean possessions or your family. Insurance protects your assets from future uncertainty. This might include life insurance, homeowners insurance, liability insurance, etc.
Insurance is a very smart tool when used appropriately. Most of us accept this and we all have various forms of insurance in our life. I think prepping is very much a form of insurance, yet the participation rate in this “insurance plan” is much lower than the other forms.
Preparing for future uncertainty now while you have the ability and time to do so is a wise move. Most people would admit to you that they are uncertain about a number of things in life and society as they look forward, yet you’d be hard pressed to find people doing anything about it. Prepping is what we neo-survivalists are doing to mitigate future risk.
We are concerned about the well being of our assets. By assets, I’m first and foremost speaking of my family, and my home and possessions thereafter. The items I buy each month to prep are akin to premiums paid into an insurance plan. The time spent learning skills now that might help me later is also akin to premiums paid.
Turning specifically to precious metals for a second, investing in gold and silver is definitely another form of insurance. By owning physical precious metals (not a gold/silver ETF), you are buying insurance against inflation and against a currency crisis. A very wise move considering the economic policies of this country (and the world).
Do you have insurance?