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Just when you think you’ve settled into a comfortable routine, life will throw you a curveball. Some incidents may have an emotional impact while others can be financially devastating. Insurance providers offer a variety of policies to protect us from the consequences of unexpected events.
To protect yourself, your family, and your property, these are insurance policies you don’t want to be without.
Health Insurance
Medical expenses are often a principal cause of personal bankruptcy or financial hardship. A brief hospital recovery can cost tens of thousands of dollars, so if you are uninsured, you are in trouble. If you are employed, your company may offer you healthcare coverage as part of your employment package.
If, however, you are unemployed or your workplace does not insure employees, you can purchase insurance directly from providers specializing in health insurance or consult the Federal Health Insurance Marketplace to look for an affordable plan and you may even qualify for subsidies if your situation meets the eligibility requisites.
In case premiums are beyond your budget, opt for a high deductible. This will initially cost more out of pocket but will lower premium expenses. Also, consider adding a Health Savings Account to your insurance policy so you can save money tax-free for future healthcare costs.
Life Insurance
If you have a family that depends on you, life insurance becomes essential to peace of mind. Almost half of American families would find themselves in financial difficulty within a year according to research firm LIMRA if the family’s principal wage earner passed away.
Life insurance policies are meant to provide income should you pass on unexpectedly. There are different kinds of life insurance, but there are generally two principal types: permanent and term life insurance.
- Permanent life insurance covers you for the duration of your life and will award a death benefit and cash value component. The cash value can be accessed through a funds withdrawal or by requesting a loan. Should you interrupt the policy while still alive, you will receive the cash value of your policy minus any fees.
- Term life insurance means you can block rate cost for a specific number of years such as 10, 15, 20, or more. You will pay the same premium until the term expires at which point you can renew it at a higher cost. These policies are great options for those that want to cover debts, college tuition, or similar.
Homeowners Insurance
Homeowners insurance is not required by law but if you have a mortgage, your lender will normally require it. In the event of a disaster whether natural or due to something like a fire, you will have the money to repair or rebuild and you won’t stop paying your mortgage.
Should you already own your home you still would have to pay for repairs and damages if disaster strikes. This is where a homeowners insurance policy can provide a financial safety net. Home insurance policies might include
- Structure or dwelling coverage
- Personal property and possessions coverage
- Additional structures on your property like fences or sheds
- Liability coverage if you cause harm to third parties
- Additional expenses such as food and lodging if you must move out during rebuilding or repairs
Renters Insurance
If you rent your home rather than own it, you should still get insurance coverage. This type of insurance policy basically reimburses you for expenses tied to the loss of personal property such as clothing, furniture, or electronics if they are destroyed or stolen. If you do not get insurance, you will have to pay for the replacement of your belongings out of pocket.
Renters insurance may include property coverage, liability coverage, and additional expenses if you must move out.
Auto Insurance
Most states require some form of car insurance so driving without it will often be illegal. But even worse, if you are involved in an accident, are at fault, and do not have insurance, the consequences can be financially devastating. Essential car insurance you should consider includes:
- Liability coverage
This insurance pays for any damage or injuries to others if an accident is your fault. This kind of policy will also cover legal expenses and eventual settlements should you be sued. Most states require this coverage.
- UM coverage
This insurance covers you and your passengers medically if another driver causes an accident, but the driver is uninsured or underinsured. Some states will require this coverage. It may cover damage to your vehicle as well as lost wages.
- PIP coverage
Personal Injury protection covers expenses related to injuries to both you and your passengers regardless of who is at fault in an accident. This kind of policy may also cover lost wages, and additional expenses like childcare or rehabilitation if necessary. Some states require this coverage while in others it remains optional.
- Collision or comprehensive coverage
Collision damage covers your car repairs or car replacement regardless of fault, while comprehensive coverage protects from just about everything including vandalism, theft, weather, fire, and more. If you have a lease or have financed your car, your lender may require it.
Saving on Essential Insurance Expenses
Although many insurance companies will offer discounts on all kinds of policies for numerous reasons such as where you live, your age, gender, credit score, personal driving history, anti-theft systems, and more, one method for saving some money is bundling.
If you are happy with one insurance provider, bundling home and auto insurance or other policies may get you a better deal on insurance premiums. Ask your insurance provider or potential providers you are considering what they can offer if you bundle together more than one insurance policy.