Protecting
your most important assets is an important step in creating a solid
personal financial plan. The right insurance policies
will go a long way toward helping you safeguard your earning power and
your possessions. In this article, we'll show you five policies that you
shouldn't do without.
Long-Term Disability Insurance
The prospect of long-term disability is so frightening that some people simply choose to ignore it. While we all hope that "nothing will happen to me," relying on hope to protect your future earning power is simply not a good idea. Instead, choose a disability policy that provides enough coverage to enable you to continue your current lifestyle, even if you can no longer continue working.
Life Insurance
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 that will 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.Health Insurance
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. Although the cost of health insurance is a financial burden for
just about everyone, the potential cost of not having coverage is much
higher.
Homeowners Insurance
Replacing your home is an expensive proposition. Having the right homeowners insurance
can make the process less difficult. When shopping for a policy, look
for one that covers replacement of the structure and the contents, in
addition to the cost of living somewhere else while your home is repaired.
Keep in mind that the cost of rebuilding doesn't need to include the
cost of the land, since you already own it. Depending on the age of your
home, and the amenities
that it contains, the cost to replace it could be more or less than the
price you paid for it. To get an accurate estimate, find out how much
local builders charge per square foot and multiply that number by the
amount of space you will need to replace. Don't forget to factor in the
cost of upgrades and special features. Also, be sure the policy covers
the cost of any liability for injuries that might occur on your
property.
Automobile Insurance
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. If you are involved in an accident, and someone is
injured or their property is damaged, you could be subject to a lawsuit
that could possibly cost you everything you own. 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 that you own at risk.
*Bonus Tip For Business Owners:
In addition to the policies listed above, business owners need business
insurance. Liability coverage in a litigation-happy society could be
the difference between a long, prosperous endeavor and a trip to
bankruptcy court.
Shop Carefully
Insurance policies come in a wide variety of shapes and sizes and
boast many different features, benefits and prices. Shop carefully, read
the policies and talk to the agent to be certain that you understand
the coverage and the cost. Make sure the policies that you purchase are
adequate for your needs, and don't sign on the dotted line until you are
happy with the purchase.
