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so I'm always been asked something how does the insurance industry work now I want you to think about this it's not one of the easiest question is to answer because we're not talking about how they died induction works but before I get to that my name is dr. Sandra t'lani I've been in the business for more than 17 years I've qualified for MDRT for about 16 years and I've got 13 top of the tables now the the problem is understanding that insurance is a is a is a very old industry it is actually diluted into culture so if you think about it if we go back to the days of the tribes there would always be a tribe and some people in the tribe would be hunters some of the tribes people would be blacksmith some of them would be farmer some of them would be Goldsmith's and they would all have different roles but there would always be a head of the tribe and the purpose of the head of the tribe was to ensure that the entire tribe was safe secured protected satisfied happy if any person in the tribe so let's say one of the hunters ever got you out the whole tribe would work together to make sure that the family of the hunter would be protected that was the reason why everyone went to do tribes that was a concept of community when tribes became bigger they moved into cities they became kingdoms the King used to play that role this he would have a Treasury that wouldn't show that his entire population was protected the soldiers were protected when they went to war the families were protected in case the soldiers did come back and that that road became more and more important it came to a point where the society became so big that the government couldn't control all these things and there was a lot of inefficiencies so they went on to privatize these enterprises and one of these enterprises was insurance that if any part of any member of the community passed away fell sick the community would work together to make sure that they are protected and that's the job of insurance insurance is a a small amount of money that is given to the community and there's what we call a risk and the money is collected in that pool of money that pool is then used to pay out if anyone falls sick if they pass away when they retire when the kids go to college that pool is used to pay those monies out the insurance company's job is to protect that pool because there are a lot of people who were trying to defraud so they would find a way to make money from that pool rather than understand that inglis for the whole community but that's what insurance does insurance is a manager of that pool of money which gets used to pay out to people who need it but there are people out there that try to defraud that moolah that's where investigation company so insurance companies will investigate claims that they feel are not genuine and that's why the most important thing when it comes to insurance is understanding the documentation understanding what is covered what is not covered and trying to sit down with a proper financial advisor or intergenerational planner that will be able to guide you on what type of insurance you should buy so the insurance industry is not a very complicated industry but is not a very simple industry because it has evolved over a few thousand years now but understanding that is where the key is insurance is a business that is based only on one thing they are Prem's on time to make sure that you cover for eventualities and there are four primary eventualities that you should become and for number one in case you pass away the family's needs income protection number two in case you fall ill the family needs income protection number three is if you when you retire you want to make sure that you have a steady flow of income and number four is when your kids go to college you might as well have some money on the side because you will need to pay for it these are the four primary things that the pool of money is used for there are other variables to it there are other types of insurance is like medical insurance car insurance travel insurance these are what we call non-life insurance 'as these insurance policies work on the same principles but the only difference is the probability changes so the premium that you pay is the probability of something going wrong if your premium is higher it means you have a higher probability of something going wrong please understand that so we I do see some clients who have for example diabetes or they have high blood pressure and the question they ask is Sanjay why is my premium higher well the probability of you falling sick is also higher and that's why your premiums higher so it's always based on the probability of something going wrong and that's the basics of how an insurance policy varies so if you do have questions sit down with a two-generation planner or financial advisor and get yourself more details for the insurance industry is here to protect you and that's what we do best [Music]