Insurance policies are extremely underrated. Nobody actually realizes how important they are, until they need them. Nowadays, you can find insurance policies to cover every single aspect of your life, but this does not mean you actually need all of those.
When you are planning for your future, insurance policies should be high on your priorities, as they can get you out of quite significant trouble in some unfortunate cases. This does not mean that you should go ahead and purchase all types of insurance policies that you can find, but the following 5 should not miss from your portfolio.
People rarely realize how important life insurance is, especially when you are married, or when you have children. Life insurance can cover many financial needs that the family has when an important member is, unfortunately, gone. It can compensate for loss of income, especially if the person was the main financial provider of the family, as well as provide a cushion for the upcoming period when the rest of the family is not able to work. Life insurance can also help cover debts left after death, as well as pay for burial costs.
When purchasing life insurance, there are some aspects you need to take into consideration, such as the difference between term and permanent life insurance.
Permanent life insurance covers you for your entire life, as long as the policy is being paid. This type of life insurance can also help you build cash value, which you can then borrow against, to grow your wealth.
Term life insurance covers you for a limited period, usually 30 years, and is sometimes preferred because it is less expensive. Keep in mind that life insurance depends on many aspects, such as age or health, which can highly influence your ability to get cover. Those who are young and healthy can benefit from lower costs, while those who are older, may have to pay higher premiums.
If you were to pick out one type of insurance you should always purchase, that is health insurance. Being in good health means you can work, make money and live a normal life, so in case of serious illness, you should make sure you do everything to get back in shape as soon as possible.
Typically, health insurance is provided by employers, so if you don’t have one, your employer is the first one to discuss it with. Employers are able to get discount packages and obtain health insurance policies at a much lower price, and sometimes it can provide coverage for both you and your spouse, if you are married.
For those who don’t benefit from health insurance covered by the employer, be it because they don’t work, or because they are self-employed, exploring your options is extremely important. Take your time and do some research before making a decision. Talk to insurers, look online for prices, and consider your options. If you are self-employed, keep in mind that, even though insurance premiums might be higher, you can apply tax deductions and lower your tax bill.
Insuring your home against damage or theft is extremely important, but because there are so many homeowners insurance policies, this is where people seem to get lost.
Basic home insurance will protect your goods in case of burglary, fire, or other disasters, but sometimes you may need a little more than that. In Florida, for example, there is a high chance of hurricanes or floods, so homes in certain flood zones are required to have Florida flood insurance to keep their homes protected.
In other places, earthquake insurance is just as important, to ensure that, in the eventuality of an earthquake, they get a little help to rebuild their house.
Extended dwelling coverage is another additional policy that you should consider. With extended coverage, your insurance company will replace or rebuild your house even in the cases where the costs exceed your coverage. Usually, they will pay 25% more than your initial coverage, but this should be discussed with your insurer.
Fortunately, most states require you to have mandatory auto insurance before you can take your car for a drive, but even if you live in a state where this is optional, it does not mean you should not consider it.
Car insurance protects you in case of an accident where you are at fault, meaning it will cover damages made to the other vehicle. Most auto insurances even go as far as covering injury treatment of the other person involved in the accident, or even death.
In case you want to cover your own car as well, you can opt to add a collision coverage policy, which you can use in case of damage to your own car, or to cover expensive replacements. If you take out an auto loan, most banks require you to purchase collision insurance as well, so it may not be you who decides that.
Some auto insurances also protect your car from theft or vandalism, as well as natural disasters, such as earthquakes, hurricanes, or floods. Auto insurance prices can vary based on state, age, or driving record, as well as many other circumstances, but they are usually affordable for anyone.
Travel insurance is not something people usually consider until they realize their luggage got lost somehow and they have nothing they can do about it. But travel insurance covers more than lost luggage.
Let’s say you planed a very expensive vacation, but two days before departure, there is an incident in your family, and you need to stay home. While some travel lines are quite understanding and you can get partial refund, most of them have quite strict cancellation policies. In such situations, only travel insurance can help you get your money back.
Most importantly, travel insurances help you with medical emergencies, which can be quite expensive in other countries. Some policies cover medical or dental emergencies, as well as transportation to the nearest medical facility, or even back home when the situation requires it.