4 TYPES OF INSURANCE EVERYONE SHOULD HAVE
No matter how much preparation you do, life always finds ways to upturn your plans and change your course. You can’t control everything but you can get protection for unexpected events. Insurance is meant to safeguard you and your dependents should certain things happen.
However, it’s also easy to get overwhelmed with the numerous insurance options, and many financial experts advise you to have all of them for maximum safety.
But before going out and purchasing all of them, it’s best to know the right type and amount of insurance based on your situation. Factors such as age, lifestyle, employment benefits, and the number of dependents play in building your insurance portfolio.
To help you decide, here are four types of insurance everyone should have:
Getting life insurance is designed to cover your family’s financial needs in case of your untimely demise. Experts suggest a life insurance policy that covers 10 times your yearly income, but that’s not a number everyone can afford.
When estimating the amount of coverage you need, remember to factor in not only your funeral expenses but also your family’s daily expenses, especially if they’re wholly dependent on your income. These expenses may include mortgage payments, child care, educational plans, and credit card loans.
There are two types of life insurance: traditional whole life and term life. The main difference between the two lies in their very names. The traditional whole life insurance covers you until you die, as long as you continue to pay the monthly premiums. Term life insurance on the other hand only covers you for a set amount of time.
According to the American Journal of Public Health in 2019, statistically, you and your family are just one serious illness away from bankruptcy. This information alone should incentivize you to obtain a health insurance plan. However, with the recent rise of co-payments, deductibles, and dropped coverages, health insurance has become a luxury few people can afford and sustain.
The best option will be to participate in your employer’s insurance program. However, this also has its drawbacks. The average premium cost to the employee in an employer-sponsored health care program was $7,188 for single coverage and $20,576 for a family plan back in 2019.
Another option is to check with trade organizations about possible health coverage. You can also check out private health insurance plans.
3.Long-Term Disability Coverage
The long-term disability insurance is often looked over by many, possibly thinking that long-term disability due to accidents and other unfortunate events are simply improbable to happen to them. Unfortunately, statistics show that at least three in ten workers will be disabled and thus, unable to work before they reach the age of retirement.
Health insurance and personal savings can only cover so much and when you can’t work for months or even years, the bills pile up.
To avoid this, check on your employer’s offer for short and long-term disability insurance packages. If they don’t offer this type of insurance, try to avail of your own. Most policies payout 50% to 60% of your income, but it‘s based on many factors like your age, lifestyle, and health.
According to the National Safety Council, on average, six million car accidents happen in the US every year, with thousands of people dying due to it. Vehicular accidents are actually the number one cause of death for Americans between the ages of 5 and 34.
Due to these numbers, some states require drivers to have auto insurance to cover financial responsibility in the event of an accident. These states also require periodic random checking of drivers for proof of insurance, if you don’t, you can be fined from $500 to $1,000.
However, fines are the least of your worries if you go without auto insurance. In the case of a collision wherein you or the other driver was injured, an auto insurance plan can also cover any litigation against you. On the surface level, auto insurance also protects your car against theft, vandalism, and natural disasters.
In conclusion, yes, there are lots of different types of insurance catering to specific areas of your life. These four types of insurance cover you for all your needs but before availing any of them, create a baseline of your financial health and check on your employer’s insurance offers.
Read the fine print, and compare and contrast different insurance plans from different providers. While it may be expensive upfront, consider it your investments for your future.
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