You know you need insurance, but how much? Which types are serious? You want to be protected but you don’t want to pay for redundant or unnecessary coverage.
Yes, the old insurance question. Everyone hates it until you need it. Then your insurance agent stands in front of you in the middle of the night with a property insurance claim form, admiring the premium you faithfully paid. Read on for tips on the types of insurance you carry and can be set aside.
Order of the Top – Health Insurance
More than half of all reported bankruptcies are related to health insurance claims. These are the bets that can topple your house deck of cards. Health insurance is very important for your ongoing financial solvency and tops this list of major insurance plans. You may think you’re maintaining a healthy lifestyle, but medical conditions have an insidious way of creeping up when you least expect them. Accidents also happen. It is best to have a good health insurance plan to avoid or reduce medical expenses and protect your hard-earned nest egg.
Do you expect to visit the doctor often? This can be especially true for young children or people with ongoing health problems. If so, you need a health insurance plan with a low deductible. The deductible is the amount you must pay out of pocket before your insurance pays. On the other hand, if you don’t visit the doctor often, you may be best served with a high deductible policy.
Automobile insurance
This insurance is not only important for car owners, but is required in almost every state. How much insurance and what type of auto coverage is needed depends on many factors.
First, is your car an old clunker or a newer model? Older vehicles may only require liability coverage. In the event of an accident, your liability policy will pay for the other party’s medical bills and vehicle repairs. And it helps avoid a lawsuit if you are at fault. Liability coverage does not pay for damages to your car or injured passengers in your vehicle.
On the other hand, if you have a new vehicle, you may want collision coverage that also pays for repairs to your car in the event of an accident. If you took out a loan to buy your vehicle, you may need to have collision coverage as part of your policy.
Comprehensive coverage is auto insurance that pays for vehicle damage outside of an accident – such as damage caused by a falling tree. It also protects the policyholder if the car is stolen.
Homeowners Insurance
Your home is usually your biggest asset and demands high protection. Homeowner’s insurance covers many types of damage and theft. But sometimes you need additional coverage to protect against floods, earthquakes, and fires — as well as other natural disasters not covered under the homeowner’s policy umbrella. Additional policies or riders on your policy may require additional fees.
Disability Insurance
You work very hard for your money. But what if an accident or illness takes you away from the workforce for an extended period of time? Can your family survive without your salary? These are critical questions to ask when you are considering purchasing disability insurance. When in doubt, a “safer than sorry” approach may be in order. Disability insurance pays you when you are unable to work due to illness or a chronic health condition. Having good disability insurance can be the difference between covering that mortgage payment and keeping your home or losing it to foreclosure.
Life insurance
The leading candidates for life insurance are definitely parents with young dependent children. While the death of a parent is devastating enough, the impact on family finances can be just as devastating. The most affordable type of life insurance is term life insurance. These policies are set for a given term – be it 10 or 20 years. In case of death during this period, the beneficiary receives the payment. And then the funds become available to carry out the functions of the deceased – from covering burial costs to paying for family income and college expenses.
Other insurance offers
Other types of insurance may be of interest depending on your individual needs. Vision insurance plans help those who have persistent vision problems. With this insurance, you can better budget for eye exams and the resulting contact or eyeglasses prescriptions—which can cost hundreds and hundreds each year without vision care insurance.
But there are some types of insurance that you generally don’t need. Life insurance for children is an example. Your children typically don’t earn the same wages as the rest of the family. Hence, it does not make sense to pay for life insurance. And beware of car rental companies that ask you to pay for insurance on your rental. Double check your auto policy but usually your own automobile insurance covers this for you.
