Liability means expenses, and assets means income. Based on this general definition, do you classify Insurance as a liability or an asset. Actually, insurance is a financial tool that will compensate you with cash against loss or damage of the insured property, asset, or even life. People need different kinds of insurance policies depending on their lifestyle, for example, if they travel a lot, they need travel insurance. They also need auto, home, health, life insurance as well. However, not always you experience loss or damage and when you don’t claim your money will be gone. Therefore, to save money on insurance, you must choose only those insurance policies that are most important to you.
Is Insurance Liability or Asset
- Thread starter Mika
- Start date
Insurance cannot be a liability since you benefit from it directly, for example if you have an auto insurance, you will get paid for any kind of damage your vehicle incur or get it repaired after an accident, which means your premium will be utilized, and in cases of life insurance, it's even way better because your insurance will bear dividend that is also tax free.
Insurance is only a liability if you get an insurance that you don't use actively, but an insurance that serves you during your down times is a good risk management tool and it can help you overcome a lot of financial challenges.
Insurance is only a liability if you get an insurance that you don't use actively, but an insurance that serves you during your down times is a good risk management tool and it can help you overcome a lot of financial challenges.
Insurance is more like a protection financial resource not a tangible thing that is an asset or a liability in its broadest definition. Whereas insurance is something you pay for what it insures is your health, home orcar and will return your money if there is an element of damageor loss. But if nothing happens, you don’t get your money back as you would operating lease. That is why it is necessary to select only that insurance that will be required foryou, such as health or auto insurance, etc., depending on your life style, which doesn’t allow buying unnecessary insurance policy. This way, you have contingencies to some events without having to waste a lot of cash on it.