When it comes to making important financial decisions, there’s nothing more important than knowing which insurance policies you need and how to buy them effectively.
For example, what exactly should you know about life insurance?
Here are the insurance policies you should know about.
Auto Insurance
For starters, if you’re a car owner, then auto insurance is a must.
This type of coverage not only protects your car in the event of an accident, but also covers damages to other people’s property and accidents that involve other cars.
In many states, your car may be towed if it’s involved in an accident, and the driver has no form of financial responsibility (e.g., liability) on their auto policy.
Homeowners or Renters Insurance
You need to buy a homeowners or renters insurance policy to cover your personal property and any liability for damage or injury that might occur on your property.
It’s also important to note that if you have a dog, some insurers will charge an additional fee for the increased risk associated with owning a pet.
##Personal Injury Protection (five sentences)
This is an optional coverage but one that is highly recommended.
Personal Injury Protection can provide funds to replace lost wages and pay medical expenses resulting from injuries sustained in an accident while not at work.
Coverage limits are based on the type of plan you choose, which typically range from $5,000 to $100,000 per person and $10,000 to $300,000 per accident.
Life Insurance
A life insurance policy is a contract between an individual and an insurer.
The insurer agrees to provide the insured with a sum of money upon the death of the insured person, in exchange for which the insured pays the insurer a premium.
A life insurance policy is designed to replace income lost as a result of death by providing earnings for survivors who were financially dependent on that income, such as spouses and children.
Life Insurance can also be used to cover debts and taxes, fund education or major purchases, or provide retirement benefits. When it comes to buying a policy, there are two different types: term and whole life.
Term Life Insurance provides coverage at a set price for a set period of time while Whole Life covers the insured until they die.
on the other hand has premiums that are higher up front, but lasts until death; this makes sense if you want lifelong protection.
Disability Insurance
In order to maintain a secure financial future in case of an injury, it’s important to have disability coverage.
This policy kicks in if you are unable to work due to an accident or illness and pays a percentage of your regular salary.
The amount of the monthly benefit is typically 60% to 70% of your pre disability income.
This means that a person who earns $60,000 per year would receive $5,200 per month if they were disabled for six months.
Most employers offer some form of disability coverage but this doesn’t always provide adequate protection.
You can purchase an individual plan with at reasonable rates based on your needs and budget.
If you’re injured on the job, workers’ compensation will take care of any lost wages but may not cover other expenses like medical bills.
Long-Term Care Insurance
This type of policy covers all medical expenses incurred as a result of long-term care.
If the insured dies while under this policy, the policy pays his or her estate the face value of the contract.
These are available for those over age 40 and often have a waiting period before coverage starts.
The premium can be expensive but it is designed to help with costs associated with end-of-life care, which can be costly if not covered by other means.
Furthermore, long-term care facilities may refuse to accept patients who do not have private insurance because they cannot afford such high bills.
Insurance companies may also refuse service to clients who are unable to pay their premiums on time, meaning that coverage would be terminated before death in some cases.
Thus, purchasing LTC insurance early may provide peace of mind for your family members in case something happens to you.
Pet Insurance
Just like humans, pets need to be insured too. The most common type of pet insurance is pet health insurance.
This type of coverage will typically reimburse your pet’s medical expenses up to the limits of your plan, but it may not cover preexisting conditions.
Some plans will also reimburse the cost of non prescription medications and treatments, or provide funds for alternative therapies like acupuncture or chiropractic care.
Check with your vet to find out what services are covered by a particular policy before signing up.
You’ll also want to check whether there are any limitations on pre-existing conditions (for example, many pet insurers don’t cover cats with diabetes).
Most importantly, make sure that you understand all the exclusions in order to make an informed decision.
For instance, if your dog has hip dysplasia, arthritis or cancer in one leg, some pet insurance plans might exclude these conditions from coverage entirely.
Identity Theft Insurance
Identity theft is a crime that can have devastating consequences, so it is important to this type of coverage will reimburse expenses incurred in restoring your identity if it has been stolen.
It may also cover legal expenses and lost wages from missed work. You want to make sure you understand the terms of the policy before buying it, as some offer more protection than others.
You also need to be sure that the provider is licensed by state or federal regulators because you are essentially entrusting them with your personal information.
Another thing to keep in mind is how the insurance company defines identity because not all providers include this specific definition in their policies.
For example, while many companies define an individual’s name as an aspect of their identity, other companies consider things like Social Security numbers and credit card numbers.
Make sure you read over the details carefully and speak with customer service representatives before deciding on one company over another.