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Is There A Need For Cryptocurrencies To Be Insured?

There are over a thousand cryptocurrencies in the market, and with that brought about numerous and various software and platforms for crypto exchange and trading, such as Coinpunk, web application that lets crypto users to handle own Bitcoin wallet service that is self-hosted and accessible on their own browser. A new crypto could be made at any time. At the moment, in terms of market cap, Bitcoin is the leading digital currency, which is also the first ever crypto and most widely utilized around the globe, followed by Ethereum, Ripple and Tether.


As the market of cryptocurrency ripens, it draws in majority players in various trades and industries, one of the is the insurance industry.


As per a report by Bloomberg, cryptocurrency insurance is prepared to turn into a “big opportunity”. A spokesperson from one of the largest insurers, Allianz, mentioned to the news publication that the insurance company was looking into options for product and coverage in the cryptocurrency space since digital currencies were turning out to be more prevalent, important, as well as relevant on the actual economy.



Why Is There A Need For Insurance In The Cryptocurrency Space?


Presently, the business on cryptocurrency, wherein it largely composes of startups as well as exchanges, isn’t huge enough to furnish ample incomes and returns for the insurance industry. Based on information that is publicly available, Coinbase, the biggest cryptocurrency exchange of North America bears merely 2% of its coins covered with the insurance company Lloyd’s of London, where the coins are kept in hot storage whereas the remaining are cut off from the internet and for the status of their insurance, not enough is known.


When the volatility or the instability of the cryptocurrency space is to be considered, cryptocurrencies being insured becomes of significance. The value of Bitcoin as well as other digital currencies which shoots up has brought about cases of online thefts of digital wallets and exchanges. In January 2019, for instance, Coincheck, a Japanese crypto exchange, was hacked and stolen from, wherein they lost 500 million US dollars’ worth of cryptocurrency. A vulnerability of the crypto space is the increasing outcome of these hacks wherein the mainstream ecosystem of finance either pay less to no attention to or snubs to take as a serious matter.


For insurers or insurance companies, cryptocurrencies exhibit distinctive challenges. Usually, historical data are the basis of insurance premiums, and cryptocurrencies lack such data. Volatility or the instability of the valuations of crytpocurrencies, wherein it isn’t unusual to have value swings of three-figures, could moreover affect insurance premiums since it lessens the overall quantity of coins being covered. Ambiguity in regulations as well as the lack of management and control at crypto exchanges could make matters worse for insurers who are interested in offering insurance services and options to the crypto industry.


Would it be Smart to Buy Life Insurance as a Form of Investment?

When talking about investment, one of the options that you might like to take into account is life insurance. If you do consider such, then you need to know its two categories which are the:

  1. Permanent Life Insurance and Term Life Insurance
  2. Term Life Insurance

In relation to permanent life insurance, it enables the policyholder to amass cash value. Something that term life insurance doesn’t offer. While you could accumulate amount with permanent life insurance, it is typically associated with higher fees and not to mention, agent commissions. If you would take time to talk to a financial advisor, the majority of them will agree that these charges are only a waste of money.


Be Cautious


As you hear more about what financial advisers say, life insurance agents who advocate life insurance as investment, they’re basically referring to cash value component of permanent life insurance and several ways that you could invest and borrow the money.

But when does it really make sense to invest to life insurance in such way and when would it be best to buy term life insurance and invest the difference instead? On that note, let us dig deeper into this matter and check at some of the most popular arguments regarding these types of life insurance.


Term vs. Permanent


By using permanent life insurance as form of investment, you will be free from paying taxes. But this is only until you’ve withdrawn the money. Additionally, you can hold onto the policy until 120 years old. Of course, this is so long as you’re paying the premiums right on time.

When you opted to term life insurance, all payments will be put towards death benefit for the beneficiaries. However, there is no cash value and thus, there’s no investment component in it.


Meaning to say, you are paying the small premiums all in exchange of a larger death benefit for the family you’ll left behind.


Why not Crypto?


If you’re not interested into this form of investment, then try other options like using the best tradelines for sale in growing your cryptocurrency. This is actually a hot thing today. With further research, you’ll discover a whole bunch of promising benefits and perks of making an investment in such.