Almost every day we hear or read the two terms insurance and investment, but many people do not understand the difference between the two terms. So let's discuss it together.
Meaning of Insurance and Investment
Insurance is an agreement between the Insured (policy holder/customer) and the Insurer (insurance company), where the insured party will pay a premium to the insurer to obtain compensation for financial risk.
While investment can be interpreted as the willingness of a person/institution to allocate a certain amount of money/assets in order to gain future profits.
Although in a sense we can already distinguish the terms insurance and investment, but we also need to know the difference in detail.
Financial Goals
The purpose of insurance as protection of self, family and assets. While investment aims to gain future profits in the form of dividends, new crypto (staking) and capital gains.
Risk Level
Insurance risk level is more certain and guaranteed, while investment risk level fluctuates depending on supply and demand.
Freedom of Funds
Funds in insurance are inflexible, meaning they cannot be taken whenever we need them, so we have to wait for the risk to occur, if there is no risk (loss) the funds may be forfeited, very different from investment, which is flexible which you can take/liquid at any time. you want to.
Meaning of Insurance and Investment
Insurance is an agreement between the Insured (policy holder/customer) and the Insurer (insurance company), where the insured party will pay a premium to the insurer to obtain compensation for financial risk.
While investment can be interpreted as the willingness of a person/institution to allocate a certain amount of money/assets in order to gain future profits.
Although in a sense we can already distinguish the terms insurance and investment, but we also need to know the difference in detail.
Financial Goals
The purpose of insurance as protection of self, family and assets. While investment aims to gain future profits in the form of dividends, new crypto (staking) and capital gains.
Risk Level
Insurance risk level is more certain and guaranteed, while investment risk level fluctuates depending on supply and demand.
Freedom of Funds
Funds in insurance are inflexible, meaning they cannot be taken whenever we need them, so we have to wait for the risk to occur, if there is no risk (loss) the funds may be forfeited, very different from investment, which is flexible which you can take/liquid at any time. you want to.
