For most of us, insurance coverage represents a love-hate
relationship. We hate paying for the premiums, but love having the right
kind of coverage when it is needed. We realize that is important to
have insurance coverage, but just the thought of contacting different
insurance agents, or researching different insurance plans, can not only
be a scary experience, but incredibly overwhelming. Knowing what types
of insurance are available, and making sure you have the correct
coverage for your lifes needs is a task that should be given careful
consideration.
Using the following suggestions, whether you are a novice or a
veteran insurance buyer, will help you to make critical insurance
coverage decisions. First and most important, is to ask yourself the
question; what kind of insurance do I need? There is auto insurance to
protect yourself and others when driving. Health coverage is a vital
issue to address, as well as life insurance, disability and long-term
health care. If you have a home, you need to protect your most valuable
possession with home-owners insurance. There are many types of insurance
for each of the categories mentioned. Asking the right questions can
make all of the difference in deciding on the policy that fits you best.
Auto Insurance
Auto insurance is required in most states. You may not be required to
carry full coverage, which includes collision, comprehensive and
medical coverage; but you are required to carry liability coverage.
Liability is the foundation of any auto insurance policy. If you are at
fault in an accident, your liability insurance will pay for the bodily
injury and property damage expenses caused to others in the accident,
including your legal bills. However, if your vehicle is damaged, the
expense to repair it will not be covered without having a full coverage
policy. Collision, comprehensive and medical coverage are for your
benefit. Collision will pay for the repair to your vehicle, while
comprehensive coverage will pay for damages to your car that werent
caused by an auto accident. Medical payments coverage will pay for you
and your passengers medical expenses after an accident. This coverage
will pay no matter who is at fault.
Collision coverage is usually the most expensive part of a policy,
you can choose a higher deductible, say $500 or $1000, and keep your
premium costs down. If you have a newer vehicle and have a lien against
it, the lending institution will require that you have full coverage. By
working with a professional insurance agent, the agent would be able to
give you many cost saving suggestions that you could take advantage of
to lower your rates, and still give you the coverage you need.
Health Insurance
Health insurance is one of the largest expenses that we face today.
Educating yourself about the different types of health insurance
available will assist you with your insurance buying decision. There are
many types of plans, but essentially two kinds of health insurance:
Fee-for Service and Managed Care.
Fee-for-Service assumes that the medical professional will be paid a
fee for services provided. Managed Care encompasses various plans and
can include: health maintenance organizations (HMOs), preferred provider
organizations (PPO), or point-of-service (POS). These plans provide
comprehensive health services to their members and offer financial
incentives to their members to use providers in their network. Health
insurance is one of the least understood types of insurance; many people
feel they do not need health coverage, but just one major illness or
accident can force you into bankruptcy when you cant pay your bills.
This is why you need to understand all the different types of plans
available and what plan would best suit your needs and budget. Meeting
with an insurance professional and asking the right questions, can save
you many sleepless nights of worry and provide you with some peace of
mind.
Life Insurance
There are some basic things to consider when you are assessing your
life insurance needs. You should first consider your financial situation
and the standard of living you would want your dependents or survivors
to maintain. Would you want a policy that would cover funeral expenses
and final medical bills, or do you have a family to consider where your
coverage would also pay outstanding debts, child-rearing expenses, and
educational costs? There are two main types of life insurance available.
They are Term Life and Permanent or Whole Life.
Term provides death benefit protection for a specified period of
time. You can buy a policy in increments of 10, 20 or 30 years. These
are usually less expensive, but your rates can increase each time you
renew your policy. With Permanent, the costs of the policy are stretched
out over a longer period of time, usually spread out over your entire
life. Permanent can also be used as a savings vehicle. Once the premium
has been paid, the company invests the additional funds. Its a very
important choice as to what insurance company you choose. A
knowledgeable and experienced agent can answer all of these and your
personal questions about life insurance.
Disability Insurance
Is disability insurance really necessary? Many of us can easily
become sick or disabled tomorrow and not be able to work for two or
three months. Would you have enough savings to cover your living
expenses? There are two types of disability insurance. Short term and
long term disability.
Short term will pay you a percentage of your salary for a short
period of time. These policies are usually not very expensive, and
usually cover a period of three to six months. Long term disability
insurance picks up where your short term leaves off. Long term will pay a
percentage of your salary until you are 65 years old. Disability
insurance can be costly when you by it on your own, but it should be a
part of everyones financial plan. It could easily be argued that you
need disability coverage more than life insurance.
Long-term care Insurance
Another form of insurance that people around 50 years of age should
consider is long term care insurance. There are many confusing forms of
this insurance, but it essentially covers costs you would incur when you
can no longer perform activities of daily living, such as dressing
yourself, bathing yourself, or the need of skilled nursing care at home
or in a care facility. Medicare and Medicare supplemental insurances
dont cover most long term care expenses. This is a very important
insurance, you would need the help of an insurance professional, one who
specializes in long term care insurance, to make sure you have the best
coverage to fit your long term care needs.
Homeowners Insurance
If you are a homeowner and you have a mortgage on your home, your
lender requires you to have homeowners insurance. There is much more to
consider than how much your coverage will cost, you need an adequate
policy that will give you the right level of protection; plus special
provisions for your valuables and other possessions. You may need
additional coverage for things such as earthquakes or floods. Before you
get a policy, you will need to take an inventory of what you have in
your home. Know what your insurance limits are, learn the difference
between replacement-cost and actual-cash-value coverage. Again,
consulting with an insurance professional and one who will listen and
understands your specific needs is essential.
With all of the different types of insurances available, it is best
to be prepared when selecting a policy. Choosing the wrong insurance
policy can have disastrous consequences for both you and your family.
There are many decisions that need to be made when looking for
insurance, such as deciding what type of insurance you would need, and
also considering what you can afford. You want to be able to speak to an
insurance agent who will not pressure you or try to sell you insurance
coverage you do not need. A professional can suggest and compare
different plans and advise you which plan would best fit your own unique
needs. All the while, offering this service at no cost to you.
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