In today’s world, it’s important to be prepared for anything that could happen, and one of the best ways to protect yourself is by having an insurance policy in place.
Insurance policies will help you cover the cost of replacing broken items, as well as medical costs associated with accidents or illnesses.
Here are five insurance policies that you should know about, whether you use them now or in the future.
1) Health Insurance
Health insurance is a form of coverage that can be used to pay for services received from health professionals.
Health insurance policies often have an annual deductable, coinsurance, and out-of-pocket maximums.
Typically, the insured individual will be responsible for paying the deductible and coinsurance.
The insurer will pay up to the out-of-pocket maximum on behalf of the insured individual.
Car insurance is designed to cover damages or injuries caused by car accidents.
If you are involved in an accident, your car insurance policy will provide coverage for both liability claims (other drivers) and bodily injury claims (car accidents).
It may also provide some coverage for property damage.
The degree of coverage offered varies depending on what type of policy you purchase.
2) Homeowners or Renters Insurance
Homeowners or renters insurance is a type of property and casualty coverage which protects the insured from financial loss when their property is damaged.
This includes fire, theft, vandalism, natural disasters and other perils.
It also covers any liability that might occur on the insured’s property for someone else who was not living there at the time of damage or injury.
If you rent your home to someone else, it may be covered by your renters insurance policy as well.
Your renter should notify his or her insurer if they are aware of an issue with their unit.
If you are renting your home, make sure to get renters insurance because it can cover the damages in case something happens.
Also, check with your homeowner’s insurer to see what they offer since it could be included under a homeowners’ plan.
3) Auto Insurance
It is extremely important to have auto insurance to protect you and your vehicle.
For example, if someone crashes into your car and causes severe damage, you may not be able to pay for the repairs on your own.
Additionally, most states require you to have a certain amount of liability coverage in order to drive on the road.
Without this coverage, you could be held liable for any damages that occur from an accident.
If there is no one else to make up for these costs, then they fall on the individual at fault.
Personal Umbrella Policy:
A personal umbrella policy will provide additional protection over what you already have with your regular home or auto policy.
These policies are typically low-cost and offer higher limits than typical homeowners or automobile insurance policies do.
4) Life Insurance
Life insurance is designed to cover financial needs in the event of death.
These needs can be emergencies, like funeral expenses and medical bills, or they can be more long-term, such as college tuition for your children.
The cost of a life insurance policy is determined by many factors: age, gender, health history and occupation among others.
Generally speaking, the younger you are when you buy a policy, the less expensive it will be.
It also depends on how much coverage you want.
Some people only need enough coverage to pay off their mortgage and car payments; others need enough coverage to provide for their spouse if they were not around.
A common goal is to have enough coverage so that upon passing away, your family would not have any outstanding debts.
5) Disability Insurance
Disability insurance is a type of insurance that pays you if you can’t work because of illness or injury.
It’s important to have disability insurance, but it’s also important to make sure the policy will cover your living expenses and any other needs if you are disabled for an extended period of time.
The three most common types of disability insurance policies include: Short-term:
The short-term disability plan pays out benefits for a limited time after you’ve been sick or injured and before you reach maximum medical improvement (MMI).
The short term plan may pay out up to 66% of your income. If you stay home from work due to pregnancy related complications.
This type of coverage would not be available through short term.
Long-Term: A long-term disability policy pays a monthly benefit while you are totally unable to work, up until MMI.
In some cases, you might also be eligible for Social Security benefits or worker’s compensation payments that could provide additional income during this time.
Conclusion
It’s important to note these options before purchasing a long-term disability policy so there aren’t any unexpected gaps in your financial security.