There are people who have insurance for all their assets: they insure their car, house, jewelry, electronic equipment, household goods -including the pins- and then place their lifelong savings in the fashion financial institution, the one that has the most propaganda beautiful and pay the best interests of the market; but that does not have other support beyond that of its own assets. Or they are delivered to the first seller of financial assets that goes through your office, so you can place them in unknown institutions located in distant regions that you have never heard of.
Evaluated from a risk point of view
Investments, like other assets, need to be evaluated from a risk point of view, in order to determine which ones you can assume and which ones must be backed by an insurer.
However, in many countries there are institutional guarantee funds, created by states and some private institutions to protect savers. It is important that you know them to know if you can use them.
Deposit guarantee funds are a resource available to savers to protect themselves, in the event of bankruptcy of financial institutions.
Savings and fixed-term deposits
This type of insurance commonly covers money held in checking, savings and fixed-term deposits. The amount covered varies depending on the country.
As an example, let's see what exists in the United States.
The FDIC ("Federal Deposit Insurance Corporation"). It is probably the best known financial insurance institution worldwide. It is a federal entity that is responsible for monitoring commercial banks and insuring savings deposits for up to US $ 250,000 per depositor. However, it is not mandatory and not all banks have this insurance.
If you put your money in a bank in the United States, make sure you are affiliated with the FDIC. This will provide maximum protection.
General purpose is to protect the trust of depositors and creditors
Similarly, in Colombia, FOGAFIN (Financial Institution Guarantee Fund) operates, whose general purpose is to protect the trust of depositors and creditors in registered financial institutions and protects deposits of savers up to $ 20,000,000 per depositor per institution. This means that in the unlikely event that two registered financial institutions are going to plummet, and the depositor has up to $ 20,000,000 pesos deposited in each one, all the amounts saved will be covered.
Before trusting a certain entity, make sure that it is affiliated with the corresponding guarantee fund. It is not very usual for banks to break, but cases have occurred and it is better to be prevented.