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September 1, 2016

8 Things to Know About Insurance

Summary:

Here are eight things you need to consider when assessing your insurance needs.

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Everyone knows the purpose of insurance is to protect individuals against unexpected financial losses in the event of illness, accident or death. That’s not surprising. What is surprising is that the majority of Americans are uninsured.

Are you insured? Are those near and dear to you protected against financial losses that could arise because of health-related problems?

See also: Gig Economy: Newest Tool for Insurance  

Here are eight things you need to consider when assessing your insurance needs.

1. What you have

First, analyze what you have now. How much do you have in your savings account? Do you have a regular source of income to meet your monthly expenses? Have you made smart investments in properties or stocks?

2. Debt

What debts are you currently running? Do you have personal loans, mortgage loans or any credit card payments due? How much of the amount is yet to be paid? What happens to the debts when something unexpected happens to you?

3. Health

Do you suffer from any health issues like back pain, obesity, blood pressure or heart problems? If so, you might want to purchase insurance plans before things get worse. It makes sense to check out reliable sources and find out whether you need to go for genetic testing. A healthy person gets as much as a 20% discount on premiums.

4. Financial commitments

Ask yourself how much money you should leave for your spouse and children to lead a stress-free life financially. How much will your loved ones require to meet their household and healthcare expenses? What are the significant future expenses they’ll need help with? Education, household and healthcare are the major expenses for a family. In addition, there will be other costs like vehicle repair and maintenance, home renovation and home appliances.

5. Childcare and home duties

Childcare is another major scenario you need to consider when thinking about whether you should purchase insurance. How would you like your children to be cared for if you or your spouse met with a major accident, disability or death? If something happens to the parents, the life of the children may be bleak if there is no backup plan. The two best ways to offer protection to your kids are (1) having a caregiver to take care of them or (2) sending them to childcare. Try to come up with a rough estimate of how much that would cost.

6. Living expenses

Regarding your personal expenses, ask yourself how much money you will need to take care of yourself when you’re affected by a threatening disease, illness or disability. Also, consider the additional medical and caretaker expenses.

7. Funeral expenses

Well, let’s hope that nothing of this sort happens to anyone at a young age or even middle age, but, again, this is a scenario that needs to be considered when assessing one’s insurance needs. The hard fact about funerals is that they are pretty expensive ($3,000 to $5,000).

8. Timeframe

In the event of illness, how long will you be able to survive without your working income? Again, this comes down to the savings you have at present and the returns from investments you’ve already made. If you haven’t made any, then it’s high time you purchased a suitable insurance plan to prevent any unexpected financial damage to you and your family.

See also: What Do Bots Mean for Insurance?  

Situations and financial status changes from time to time, so ensure your insurance needs are regularly reassessed and you are covered accordingly. If you’re not sure how to get started, getting in touch with an expert is the best way to go about it. Talk to multiple insurance agents and compare different plans before choosing one.

Make sure you are always covered!

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About the Author

Joyce is a blogger and content marketer who writes on topics related to insurance and finance. A writer by day and a reader by night, she takes pride in educating readers on the best ways to take an investment decision so they can lead a better life financially.

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