We can’t prevent unexpected things from happening in our lives, whether they be good or bad. And sometimes one unfortunate accident or trip to the hospital is enough to push us into bankruptcy. Let’s face it– life is hard these days. So it only makes sense that we protect what little assets we have. It’s one of the most basic steps you can take in creating a solid financial plan for yourself.
Having any kind of insurance policy acts as a financial security blanket that just might save us from having to touch our savings if an unfortunate event does happen. It helps us protect ourselves and our families from a terrible financial fallout.
Nobody wants to spend more than what they need with insurance, and there are so many to choose from that it can get a bit overwhelming at times. There are also a few factors that need to be considered, like your age, lifestyle, number of children, and even employee benefits.
In this article, we discuss some of the basic types of insurance that we recommend everyone should have: health, home, life, auto, and travel insurance.
The financial costs for medical procedures are skyrocketing, making health insurance an absolute necessity if you don’t want to or don’t have the means to pay the exorbitant bills out-of-pocket.
To offer some perspective, a simple visit to your general practitioner can already set you back a few hundred dollars. More serious injuries and medical emergencies that land in a hospital stay for even just a short amount of time is a whole other thing. The bill from a 2 to 3-day hospital admission can rival that of a luxury hotel.
Injuries and other medical emergencies that might require surgery can cost up to five figures– easily pushing the normal middle-class American to the brink of bankruptcy. Although the cost of insurance premiums can be a burden for anyone who doesn’t really have the extra budget, the potential cost of not having one in case of emergencies is much, much higher.
If you’re on a tight budget, even a minimal health insurance policy covers an annual general check-up or a doctor’s visit for the occasional flu– so it’s not only useful in times of emergencies. If you earn just enough to make ends meet, and for basically nothing else, you may be eligible for government-subsidized coverage. If you earn even lower, you may be eligible for Medicaid. Most salaried employees can also avail of their company’s insurance program if it’s available.
Homeowners insurance– also known as home insurance– is a type of insurance policy that provides financial protection to its policyholders in the event of something unfortunate happening to their homes and possessions.
Your home and personal belongings aren’t the only things it protects, though. Most standard policies would also be able to provide liability coverage in case someone gets injured while on your property, and decides to sue you or seek damages. Some policies also include a loss-of-use coverage– meaning, the insurance company will reimburse you for your stay at a hotel when you can’t stay in your home for some reason.
Although the law does not require homeowners to have a home insurance policy, some banks do require it as a condition when applying for a mortgage, and virtually all of these companies will require their borrowers to have insurance coverage for the full value of a property.
Even if you do not have or own a house yourself, if you are renting, many landlords will still require their tenants to have some sort of insurance coverage. Although they do this to financially protect themselves, it’s still smart to have the protection that a homeowners insurance policy provides.
Having home insurance would also come in handy in the event that your house is involved in unforeseen events like burning in a fire, being destroyed due to natural disasters, and even theft. It is an inexpensive way to avoid having to pay out-of-pocket to rebuild or repair your home.
Life insurance isn’t necessarily for yourself, but for the people who are financially dependent on you. This is a priority for most people who are breadwinners– someone who, in the event, they become incapacitated, won’t be able to provide for the needs of their parents, spouse, or children who only depend on them. That is why it is important to have a life insurance policy
Most people purchase a policy equivalent to how much they earn in a year. The right insurance policy would be able to cover that amount in the event that you die or become incapacitated to work. Some people also factor in funeral and burial costs, as the amount it takes to bury someone can be a burden to the families left behind. Other things you need to factor in include your family’s daily living expenses, mortgage payments, outstanding loans and debt, child care, and taxes. Most experts suggest purchasing a policy that pays out 10 times your annual income, but that can also cost a higher monthly premium.
There are two basic types of life insurance you can choose from– whole life insurance which serves as both an insurance instrument and an income tool, and term life insurance which covers you for a set amount of time.
Although auto safety has faced many major improvements in the past several years, 2021 alone has recorded an estimated number of more than 50,000 people dying in traffic-related accidents in the US. Before issuing a driver’s license, most states require their drivers to have auto insurance. To get the most out of auto insurance, we recommend checking out the benefits of Wibe auto insurance.
Accidents cannot be avoided and the results are often tragic. Auto insurance will cover financial expenses you are responsible for in the event that you are involved in an auto-related accident and caused damage or injuries to someone else. It would also help protect your family against any lawsuits that might result from the accident. Auto insurance also covers theft, vandalism, or a natural disaster.
As with any type of insurance policy, your specific circumstances will determine the cost of how much you’re going to pay in monthly premiums. Insurance companies generally look at a few considerations, like the policyholder’s personal information like age, gender, marital status, driving record and accident history, and credit history. They also take into account your vehicle type, usage, and location.
Lastly, if you’re a frequent traveler who spends a considerable amount of money when booking your trips, it makes sense to have a travel insurance policy. Standard policies cover common problems when traveling, like the costs it takes to rebook a flight, replacing lost or damaged luggage, or even medical services received out of the country. Some policies even cover dental emergencies and medical transportation.
The best insurance providers offer great coverage without charging exorbitant amounts. So keep this in mind before purchasing a travel insurance policy. Other things you need to consider are high customer satisfaction ratings, and their ability to provide 24/7 assistance to their clients. When you’re traveling, most of the time you’re in a different timezone than your insurance provider, so it makes sense that they offer round-the-clock customer service support in case of emergencies.
Insurance Policy FAQs
How Do You Cancel an Insurance Policy?
A policyholder must cancel an insurance policy according to the cancellation provisions of their contract. Often, insurers allow policyholders to cancel by phone; however, some require the request in writing.
How Do You Make An Insurance Claim?
There are several steps you need to take before filing whatever type of insurance claim. Here are some general procedures that are basically the same with any type of insurance:
- Call the police if a crime was committed. Call 911 if someone is injured. It’s not a requirement to have a police report to file for an insurance claim, but it helps act as a piece of supporting information.
- Document everything from the scene of the incident and gather relevant information from everyone involved. Data like personal information, insurance policy numbers, and photos are very useful.
- Contact your insurance claims customer service once you’ve had all your necessary files and information. Your insurance provider usually has a dedicated claims phone number that you can call, like 800-776-4737 for Progressive Insurance.
- Now it’s time to file your insurance claim. Most companies have online options to file your claim or through a mobile app. You can also phone agents, or simply send the claims form via email or fax.
The Bottom Line
Most experts agree that insurance policies come in handy, no matter how small the coverage is. What’s important is you have a buffer for when things go amiss, as accidents do happen and sometimes cannot be avoided. Choose the insurance company and policy they offer carefully. Read through the fine print, and talk to an insurance professional to be certain that you are getting your money’s worth.
Insurance policies are highly customizable so make sure that the coverage is adequate for your needs, and if it’s not, don’t sign anything unless you’re happy and satisfied with the policy offered to you. Be in control of what you want by being well-informed in making these kinds of decisions.