I see insurance ads everywhere – on the TV, on the internet, and in the newspapers. Needless to say, such ads do yield a good ROI to advertisers as a lot of people buy insurance policies. Being prudent doesn’t hurt, rather it helps you identify the right insurance.
In this article, I’ll help you select the right insurance. Below, I list the essential insurance types in which you should invest your money. The list begins with
Health insurance
I guess you’d agree without arguing that health insurance is the most important among all insurances out there. Health is the wealth – it’s an age-old idiom. What’s the point of having King Solomon’s treasures if you are not healthy? None. Besides, when health deteriorates, money goes to the drain.
So invest your money in health insurance. If you have already purchased a policy, increase its coverage. For those, who are unemployed, finding an affordable insurance policy is almost impossible. Surveys indicate there are nearly 50 million Americans, who don’t have health insurance coverage.
Even when employers sponsor the insurance, employees have to pay more than $4000 as premium. Add to that the spike in co-payments, the number of dropped coverages and the increase in annual deductibles, and health insurance seems almost like a privilege. So, do your research, look for reputed health insurance providers, and compare their policies, so you could select the most useful and the most affordable one.
Life insurance
I know you’d wonder why I acknowledged health insurance first and not life insurance. Simple, if you are healthy, then you’d enjoy life for a long time. Life insurance policies are for your near and dear ones; your absence shouldn’t put them in a financially distressing condition.
Life insurance policies are of two types; the whole life and the term life. The main difference between them is the former requires you keep paying until your life is over and the latter is for a fixed period of time. There are other differences.
Don’t be hasty when choosing a policy. Spend enough time deciding which one’s gonna be the best for you. Both have pros and cons.
- Whole life insurance: The advantage of whole life insurance is it covers your entire life. You just need to pay the premium every month, that’s all. You can break the fund any time and withdraw the money. The problem with such policies is they are expensive because of sales fees and investment management fees.
- Term life insurance: Term policies come with a timeline such as 15 years, 20 years or 30 years. The problem with this type of insurance is you are covered for a fixed duration, not beyond that. On the advantageous side, the premiums would be cheaper.
Do you have children? Are you worried about life after retirement? Paying mortgage cost? Sort out your priority, and select the insurance on that basis.
Accident insurance
Life is too uncertain. Nobody knows what’ll happen next. A mishap might claim your life. If insured, you could save your family members, especially your kids, who are dependent on you, from facing financial problems. If you are lucky enough to be alive but seriously injured, you could manage medical expenses.
One advantage of accident insurance is the eligibility criterions are flexible. Different providers have different requirements, but the majority want the buyer to be between 15-65 years of age. While some providers may want you to go for a pre-policy check up and send the report across to them, many don’t. Look for providers who offer tax benefits on premiums per the 80D of the income tax act.
The standard coverage of personal accident insurance policies includes death due to accident, loss of body parts due to an accident and permanent impairment. The exclusion terms are like fine prints; read them carefully to ensure no issue arises later. For example, buyers are not covered for deaths due to natural causes; he’s covered for accident related deaths.
Automobile insurance
Auto insurance is mandatory in the United States. However, each of the fifty states has its own minimum coverage requirement and the requirement of one state differs from that of another state. Many states impose certain conditions that insurers need fulfil.
States want insurers to ask for coverage for bodily injuries caused by an auto accident and for property damage. The two types of injuries have two different coverage brackets. The minimum coverage for bodily injuries range from $20000 to $80000. The minimum quote for property damage is between $5000 and $25000 range.
The insurance industry data reveal drivers of large vehicles such as trailer trucks, SUVs file less number of accident injury claims. Most claims come from passenger vehicle drivers. If you drive a passenger vehicle, be extra cautious. You might want to invest money in a collision proof car instead of paying high insurance premiums for additional coverage.
What do you think of the four types of insurance discussed here? Do you think we have missed anything? Please do let us know in the comment box.