Today there are so many different types of insurance plans available. If everyone weren’t on a budget, you could protect yourself for all of life events with life insurance for a premature death, health insurance for medical needs, dental insurance for your teeth and gums, car insurance for your motor vehicles, long term care for help with activities of daily living, disability to protect your income, and critical illness to help with expenses when a person is diagnosed with a serious medical condition or experiences a heart attack.
When I meet with responsible citizens my job is to help them understand that mishaps happen and we design a plan to protect them as much as we can. The must haves of insurance are:
1.Health Insurance
If you have a cold or need knee surgery because of an intramural soccer game or diagnosed with a rare condition, you want health insurance. Health insurance is so selective on individual plans (when you don’t have a group plan through your employer) that they can ding you for a pre-existing condition even if you had it just once. The solution: to get health insurance when your medical history is squeaky clean.
2.Disability Insurance
If you hurt yourself off the job like crashed when you went skiing and could not work then you would not receive a paycheck. If you were seriously injured and couldn’t work for a month or three months, would you be missing that paycheck? Would you still have your monthly living expenses to take care of? YES. By having a disability income policy, you can ensure that you’ll receive an income stream to pay your living expenses.
3.Auto Insurance
It’s required by law. Don’t risk not having it.
4.Life Insurance
If you have people who depend on you for income such as a spouse, children, a parent-get covered. Rule of thumb is 10-20 times your income. Most financial professionals can offer you a Survivor Needs Analysis to determine the right amount of coverage and to think of the “big picture” when something happens to you. Life Insurance is for the living not the dead. Life still goes on for your survivors. Don’t set yourself up to be remembered as the irresponsible person who didn’t show their love with a life insurance policy.
Insurance is risk transfer. Transfer as many risks to a company as you can. You never know what will happen in the future. Be sure that you work with a reputable company with a track record. You want to be sure that the company that you entrust your long term financial tools with will be there in the future to pay your claim.