5 Insurance Policies You Must Have
Saturday, January 21, 2012, 6:00 AM | Leave Comment
I know these are very difficult times. Many folks have lost jobs. The job situation may be improving though. But many are discouraged to even look for a job. Some have exhausted their unemployment insurance benefits.
So in a time like this, giving advice about insurance is not a good thing or maybe it is precisely for that reason.
No matter what, there are things in life we should not be without. My post title says ‘must have.’ I strongly suggest, if you don’t have these types of insurances, please figure out how much you can afford to get them.
If you are heavily in debt, I suggest, you stay away from someone selling you a new mortgage, an insurance policy or a “chance of a lifetime” stock. The suggestions that I have given below are for people who can afford them.
-
Health Insurance
This is probably the most important insurance type of all. You may be in the best health of your life.
You eat your vegetables and go to the gym, but there are times, that your health may give up on you.
Or worse, you can get into accident or some other personal calamity. Everyone requires medical help at some point and if you don’t have insurance, the resulting bill is going to be painful.
I come from the old country. My mother tells me I was delivered with the help of midwife and at home. It cost next to nothing. But those days are gone. I am now 63 years old now.
In the States and any place else for that matter, delivering a baby – without complications – and expect to fork over an average of $10,000, says Matt Tassey, former chairman of the Life and Health Insurance Foundation for Education (LIFE).
You can also read on how to find and keep affordable health insurance.
-
Disability Insurance
It is, probably, human nature that they never think that they can face disability of some kind one day.
One major accident could keep a person out of work for months or even years or worse for life. Let’s face it. Nobody likes to think about what life would look like should disability strike.
But the reality is one third of all Americans between the ages of 35 and 65 will become disabled for more than 90 days, according to the American Council of Life Insurers. One in seven workers will be disabled for more than five years.
If you don’t have disability insurance, you could eventually face bankruptcy. Disability insurance replaces a portion of up to 60% or 70% of lost income if the policyholder can’t work due to an illness or injury.
Often times, companies pay for employees’ disability insurance, or offer it as a voluntary benefit that employees pay for.
Individuals can also buy their own policy, although the premiums will cost around 15% more.You can shop around but carefully.
These policies are very complicated, for example what qualifies as a disability, and can be hard to land on your own. Also, costs will vary based on an individual’s income and type of coverage.
If your employer doesn’t offer adequate coverage, contact independent insurance agents who can provide you with a range of policies.
Get answers for the most commonly asked Disability Insurance Questions.
-
Auto Insurance
In some states like New Hampshire where I lived for more than 20 years, auto insurance is not mandatory unless the car owner gets into an accident.
Then the liability insurance becomes mandatory. States require different minimum amounts of auto insurance, but it’s not enough to take care of things when they really count.
Every driver should invest a little extra in comprehensive and collision coverage, especially if their car is less than 10 years old, says Claire Wilkinson, vice president of global issues at the Insurance Information Institute.
Comprehensive coverage protects a car from vandalism, natural disasters like a storm or a tree falling on it, and most other damages — excluding collisions.
That’s where collision insurance comes in. It helps pay for repairs to or replacement of a car if it’s involved in an accident with another vehicle.
-
Homeowner’s or Renter’s Insurance
Whether you own a home or rent, this type of insurance is the best protection you can have. Homeowner’s insurance is, in most cases, mandatory from your lending bank.
Even if you are one of those lucky ones whose home is all paid for, this type of insurance is a must.
If you are renting, the contents of your renting place should be insured. It is not that expensive either. I pay $100 a year in premium for a $25,000 insurance.
Homeowner’s insurance covers the house and everything in it, while renter’s insurance covers all of a tenant’s personal belongings that are in their home. The best part is that these policies are relatively cheap.
When shopping around, look for one that includes personal liability, which pays for medical expenses should someone become injured on the property.
You can read more about this type of insurance on Federal Citizen Information Center.
-
Life Insurance
If you are married and have children, for their protection, you should get life insurance.
If the holder of life insurance passes away, then their beneficiaries will likely receive the policy’s benefits tax-free.
Easy enough, but here’s where it gets tough: Deciding between joint term life insurance and whole life insurance policies.
A term policy offers life coverage only, and is typically offered in terms of 10, 20 or 30 years.
A whole life policy offers life coverage with an investment component, and it can last until you’re 100.
For most people, the better choice is a term policy. Premiums are usually less expensive than that of a whole life policy.
Term insurance can be as little as 10% to 30% of the cost of whole life insurance, although this can vary on a case by case basis.
In a Nutshell
No matter what your financial status, the above 5 insurance policies you must have. Try to come up with premium for each policy.
