Insurance – A Safety Net for Your Finances

The Bottom Line: The money you work so hard to earn should continue working for you, to provide you with financial security. It’s important for your money to grow, but making that happen is no simple task. Volatile markets and recessions can be serious obstacles to building wealth. However, all of that pales to the consequences of an unwanted event such as a serious illness or accident. In fact, many people run up big debts due to medical bills. Insurance – life, medical, auto, and homeowner –help protect your assets and can guarantee a steady flow of income. Proper insurance coverage is an important part of your overall financial portfolio. It’s important to get professional assistance and to compare competitive offers from different providers. Take advantage of online sites to find the best offers.

Can you imagine riding in a car without a seat belt?

Of course not, because it is mandatory. It also saves lives. However, there are many cases where we can choose to implement extra safety precautions. For example, there is no doubt that a bicycle helmet can prevent serious injuries. However, in some places wearing a bicycle helmet is mandatory, while in other areas it is optional.

Insurance is a basic financial product that protects you against risk. In most cases, insurance covers events that can cause great damage resulting in high costs and expenses. The most common types of insurance are life insurance, health insurance, auto insurance, and homeowner’s insurance.

Insurance policies have a lot of fine print. Before you purchase insurance, check the details and ask the provider (or agent) questions. Insurance is a highly competitive field, so shop around.

Insurance - Maintain Income

One of the most common types of insurance is life insurance. Life insurance helps protect your family in case of death. This is very important because it will help your family pay off debt and/or maintain enough income to cover living expenses.

Life insurance is often part of your overall retirement investment portfolio. There are two main types of life insurance, as follows:

  • Term insurance pays out to the beneficiary in the case of death of the policy owner.  
  •  Permanent life Insurance policy includes an investment or savings element in the policy in addition to term insurance.

Life insurance coverage and price depends on a number of factors including your age, health, and the number and age of the people who depend on your income for support. Medical conditions can be an issue. Inform the agent or salesperson if you have any serious medical issues.

Insurance- Cover Expenses

Just as important as protecting your income and assets, other types of insurance protect you against unforeseen expenses.

A simple accident like falling down the stairs can result in broken bones and concussions. Without proper medical insurance, you may face huge medical bills including hospital bills, x-rays, MRIs, medication and doctor visits. Here are some tips to finding the right type of medical insurance:

  • Check with your employer if they have a plan that covers you and your family
  • Check the monthly premium and “out of pocket” deductibles
  • Check the plan and network. Some plans limit your choices or have additional charges if you use doctors outside of their network.

Auto insurance and homeowner insurance are more standard. However, they each come with different coverage and premium options. If you have a mortgage loan or auto loan, then your lender will most likely require you to have an insurance policy.

If you are in an accident, it is possible that you could face serious economic consequences, including total loss of your car or personal injury liability. The major types of coverage are collision, comprehensive, uninsured and underinsured motorist, and personal injury protection. The type of coverage, your driving record, and special rewards program and discounts all affect the premium. Auto insurance is very competitive, so shop around. However, make sure that you work with a dependable company and agent.

A home is possibly your biggest asset. If you have a mortgage, then you are probably covered. Just the idea that your hard-earned asset can go up in flames is a strong motivation to get home insurance.

Homeowner insurance varies by region. Some areas require special flood insurance and other areas are hard to get adequate coverage due to hurricanes. It is very important that you check with the agent the exact terms of the coverage. If you want personal belongings covered, then speak to the agent. Other factors that influence your policy are previous claims, type of security systems (smoke detectors, locks, and alarms), building materials, and special systems to cover risks from special weather situations.

Shop for Your Insurance

Insurance is an important part of budget. In some cases, it is mandatory and other cases optional. However, who can really afford not to have insurance coverage?

Like any financial product, it pays to shop around. Insurance contracts have a lot of fine print. It is important to ask questions and find the product that best meets your needs and budget and asset portfolio. It is a good idea to get recommendations and check the trustworthiness and reputation of any professional that you use.

Certain products are easier to shop for online, like auto insurance and homeowner insurance. Once you know the type of insurance you are looking for, check for rates online at insurance comparison sites as well as the big insurance company sites.