Protecting your assets is a great first step to stabilizing your finances. The best kind of insurance policy will stretch quite a bit to help you secure your possessions and your potential earning power.
It’s impossible to prevent unexpected events from occurring. But sometimes there are steps we can take to protect ourselves and our loved ones from experiencing a lot of the financial fallout.
There are many types of insurance available today. However, there are several insurance policies that everyone should have in case the worst was to happen.
Let’s get straight into this list.
Automobile Insurance
Nearly all states require drivers to have automobile insurance by law. The few states that don’t have this requirement still hold all drivers financially responsible for the damage or injuries that they might cause if they get into an accident while driving.
Auto insurance will cover these expenses and will help to keep you safe from the legal action that may follow the accident. This type of insurance also protects your vehicle from natural disasters, vandalism, and theft.
But, like other insurance types, the total cost will be determined by your circumstances. You should check out Assurance car insurance to find the best auto insurance coverage. Make sure to keep checking these quotes to see if you can qualify for a lower overall rate.
If an accident you’re involved in results in property damage or inflicts an injury onto someone, you could be subjected to a lawsuit that may cost you everything that you own. These accidents might occur quite quickly and often yield tragic results.
Life Insurance
Life insurance should be high at the top of your required insurance priority list. Life insurance protects the family members that are financially dependent on you in the case of your unexpected death. This could include children, a spouse, parents, or other loved ones.
Robert Schmidt with Burial Insurance Pro’s notes “one of the most important reasons to have life insurance coverage is to help offset a mortgage payment, outstanding debt, and to address your funeral expenses. They are mortgage protection and burial insurance options that almost everyone can medically qualify for. Not to mention, premiums are affordable and will fit your financial budget.
The two basic types of life insurance you can choose from include term life, which covers you for a set amount of time, and traditional whole life which can be used as an insurance instrument and an income tool (provided you don’t miss a payment for your monthly premiums!)
When looking at taking out a new policy, you should opt for one that pays out 10 times the total of your yearly income to ease financial burdens. You must factor in:
- Your age
- Your occupation and your total yearly income
- The total of your family’s daily living expenses including credit card debt, child care, taxes, and future college tuition
- The number of years you plan to stay employed
- The total cost of the burial
Long-Term Disability
Suffering a long-term disability (LTD) caused by an injury can often be completely life-changing. It’s in our nature to hope that nothing too bad will happen to us, but simply relying on hope isn’t the most effective way to live your life. This is why you should ensure you have an LTD insurance policy.
Even if you think you’ll never need one, it’s always a good idea to invest so that you are covered if you cannot continue to work.
LTD provides a significant monetary benefit that isn’t generally covered by health insurance. Many employers offer short and long-term disability insurance policies as part of a benefits package, which is the best for disability coverage.
You need to consider:
- That the policy that can guarantee income replacement is optimal
- That you read the fine print of a document to ensure you fully understand what you are committing to
- That the total cost of disability insurance is based on factors like your lifestyle, age, and health
To receive all of the benefits of long-term disability insurance, the disability must have occurred once the policy has been issued, and typically after a period of waiting. Relevant information including medical records must be issued to the insurer for their consideration.
Health Insurance
Medical care costs are soaring more than ever before, making health insurance a necessary part of life. A quick visit to your family doctor might result in a huge bill that you might not be able to afford.
If you were to sustain a more serious injury that causes you to check into the hospital for a few days, you could generate a bill that puts you in dire financial straits.
If you sustain an injury that requires surgery to fix, you could have a medical bill that extends well into the tens of thousands and matches the price of a one-week all-inclusive holiday to a five-star resort.
It’s a known fact that health insurance isn’t cheap. But the potential cost of not having coverage if you were to experience such an injury could be much higher without an insurance company to contribute towards your bill!
Homeowner’s Insurance
Having to replace your home can be expensive but knowing you have the right insurance to cover you will make the process a little smoother. Look for a policy that covers the total replacement cost for the structure and contents of your home, and one that covers the cost of temporary accommodation while you’re home is being repaired.
Rebuilding costs don’t need to include the cost of the land as you already own it. Realistically, depending on how old your home is and the interior contents, replacement costs could be greater or less than the total price that you paid.
For an accurate estimate, you should inquire about the amount local builders would charge you per square foot, and then multiply it by the amount of space you’ll need to replace. Also factor in the costs of special features and upgrades.
You also need to ensure the policy completely covers liability costs for injuries that may occur on the grounds of your property.
Summary
From covering medical bills to securing the contents of your home, these are the important types of insurance policies that everyone should have. Loss is inevitable in this game we call life, but having insurance limits the overall degree of impact these losses have on our daily lives.
