Important Of Insurance Policies Protecting your most important assets is an important step in creating a solid personal financial plan, and the right insurance policies will go a long way toward helping you safeguard your earning power and your possessions. In this article, we discuss five policies you shouldn’t do without.
- Life insurance should be high on your list of required insurance policies to protect the people who are financially dependent on you.
- The soaring cost of medical care is reason enough to make health insurance a necessity. Replacing your home is an expensive proposition. Having the right homeowner’s insurance can make the process less difficult.
- Long-Term Disability Insurance
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The prospect of long-term disability (LTD) is so frightening that some people choose to ignore it. While we all hope that “nothing will happen to me,” relying on hope to protect your future earning power is not a good idea. Instead, choose a disability policy that provides enough coverage to enable you to enjoy your current lifestyle even if you can no longer continue working.
Long-term disability provides a monetary benefit equal to a portion (e.g., 50% or 60%) of the insured’s salary for covered disabilities. Long-term disability typically begins when short-term disability ends. To receive benefits, the disability must have occurred after the policy’s issuance and then, typically after a waiting period. Medical information, often confirmed by a physician, must be provided to the insurer for consideration.
Life insurance protects the people that are financially dependent on you. If your parents, spouse, children, or other loved ones would face financial hardship if you died, life insurance should be high on your list of required insurance policies. Think about how much you earn each year (and the number of years you plan to remain employed), and purchase a policy to replace that income in the event of your untimely demise. Factor in the cost of burial too, as the unexpected cost is a burden for many families.
The soaring cost of medical care is reason enough to make health insurance a necessity. Even a simple visit to the family doctor can result in a hefty bill. More serious injuries that result in a hospital stay can generate a bill that tops the price of a one-week stay at a luxury resort.
Injuries that require surgery can quickly rack up five-figure costs.
Replacing your home is an expensive proposition. Having the right homeowner’s insurance can make the process less difficult. When shopping for a policy, look for one that covers the replacement of the structure and the contents, in addition to the cost of living somewhere else while your home is repaired.
Some level of automobile insurance is required by law in most places. Even if you are not required to have it, and you are driving an old clunker that has been paid off for years, automobile insurance is something you shouldn’t skip.
Accidents happen quickly and the results are often tragic. Having no automobile insurance or purchasing only the minimum required coverage saves you only a tiny amount of money and puts everything else you own at risk.
Important Of Insurance Policies