Understanding Investment Insurance
The term investment insurance may sound like a wonderful option for any individual who is planning on making investments in stocks, bonds, or mutual funds, but this insurance isn’t about protecting against the depreciation in value of your investments.
Investment insurance is about protecting your personal investments against unexpected occurrences or events that can cause loss to your investments. These unexpected occurrences can include fire and theft. They do not protect against losses due to the depreciation in value of those investments.
Investment is about Risk
The essential cornerstone of investment is that there is risk involved. When you purchase a stock, bond, or mutual fund, you are taking a chance that the value will increase over time, earning you more dividends and returns on your investment during that period of time.
It has become far too common in recent years for individuals to expect that their investments will be guaranteed or at least insured against losses. Much of this misinformation comes from the United States and their government stepping in to ensure certain investments such as those made in the housing market and the stock market in the past few years.
So What Does Investment Insurance Mean?
Most banks operate with a general insurance covering deposits. In the US, this is known as FDIC. This insurance simply guarantees that an individual’s deposit within a bank or financial institution is protected in the event that a financial crisis occurs and most of the bank’s customers attempt to withdraw their money at the same time. Most banks do not have cash assets to cover all of the deposits that they hold.
When you make investments, there is always the risk to have those investments stolen. You may invest in precious metals and those metals would require insurance against theft or fire or damage.
If you want to learn more about investment insurance, contact a professional insurance agent at James Campbell Insurance Brokers today and we will be more than happy to discuss the various investments insurance options that are available for you.