How do you know the right type and amount of insurance you need ? It’s always determined by your particular situational factors such as children , age , family , lifestyle and employment benefits have an active role to play. However most financial experts recommend people to have four types of insurance which are life insurance,health insurance,auto insurance, and long-term disability insurance.
We can’t prevent the unexpected from happening in our lives, can we? We deserve to get some protection financially as well isn’t it? That is where Insurance comes to the spotlight. It is meant to safeguard us financially if something happens when we least expect it. There are so many insurance options and we may feel like we have to have all of them ,but as already said it depends on various factors on our lives before we come to a conclusion.
Important Insurance Types Required
Let us now get familiar with the various types of insurances to help us to decide where we fit in. The first one to go for is of course insurance for our own Life. Life insurance has the capacity to cover things which includes mortgage payments, outstanding loans if any,credit card debts,child care and future college costs. The most important ability of this type of insurance is the ability to cover your funeral expenses and provide for those who you leave behind.
Now this part is very important indeed because if your family is solely dependent on your salary to pay the bills then it is a must have. As per a study by the Life Insurance and Market Research Association, one in three families were not able to meet their day today expenses within a month of the primary earning members demise.
Coming to another type of insurance related to Health, yes ,you and your family members may have any type of illness one day or the other and rather than going bankrupt and feeling sorry,having a Health Insurance can serve the purpose without regret. As per a study published by the American Journal of Public Health in 2019, a survey had more than 900 Americans reporting their personal bankruptcy between 2013 and 2016 due to medical problems from bills,due to illness or both contributed a lot more in their lives. Now that should lead you to the awareness of how important getting health insurance is. It’s been studied that the national average cost for one day in the hospital was $2,517 so even a minimal policy is better than none at all.
According to the statistics of the United States as per the Social Security Administration one in four workers entering the workforce will be unable to work because of any disability that arises after an incident. This leads the person into a disability which won’t allow him to work for the rest of their lives even before they reach the age of retirement.
Even when the workers who have a great health insurance in place or even a life insurance they will just be able to pay for hospitalization and medical bills but not those daily expenses that your monthly paycheck generally covers. This is where Long-Term disability insurance plays an important part in your life. However the cost of disability insurance is based on many factors including age,lifestyle and health. Each policy has its own fine writings and clauses in place though.
The last but not least is the insurance that gives a cover to your personal vehicles. According to the National Highway Traffic Safety Administration there were 6.7 million car accidents in the U.S in 2018 and an estimated 38,000 people died in car crashes in 2019 alone. The data of the unfortunate events goes on like that. Not all the states require drivers to have auto-insurance ,they do have regulations regarding financial responsibility in the event of an accident.Its not that you can get away by hitting someone or crashing into something or you can’t allow someone to do something like that to yourselves.
In states where auto-insurance is mandatory a periodic random check of drivers for proof of insurance is done. If you are found to drive without it the fines can be very tough and your license might be even suspended. Fines vary from $500 to $1000 based on the convictions you get imposed. When you have the auto-insurance in place and then have an accident then the fines or compensations will be the least to add to your financial burdens. Auto-insurance helps to protect you against any lawsuit that might result from the accident. Also it protects your vehicle against theft, vandalism or a natural disaster such as hurricanes or other weather related incidents
Being said all those you can always check with your employer first for the available coverage and in case they don’t offer the type of insurance you want, you can always obtain quotes from several private insurance providers. Some might offer coverage in multiple areas ,while some provide discounts if you purchase more than one type of plan they have with them. The insurance may be expensive as you may feel but not having one in the right place could cost you more to repent for the rest of your lives.