By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Financial Slot
  • Home
  • Net Worth
  • Business
  • Save
  • Insurance
  • Wealth
  • Investment
  • Cryptocurrency
  • Loans
Reading: 4 Important Types of Insurance Policies Everyone should own
Share
Aa
Financial Slot
Aa
  • Home
  • Net Worth
  • Business
  • Save
  • Insurance
  • Wealth
  • Investment
  • Cryptocurrency
  • Loans
Search
  • Categories
    • Technology
    • Entertainment
    • Travel
    • Fashion
    • Business
    • Politics
    • Science
    • Health
  • Bookmarks
  • More Foxiz
    • Sitemap
Follow US
  • Blog
  • Advertise
© 2022 Financialslot.com. All Rights Reserved.
Financial Slot > Blog > Insurance > 4 Important Types of Insurance Policies Everyone should own
Insurance

4 Important Types of Insurance Policies Everyone should own

Kreg Bale
Kreg Bale November 30, 2019
Updated 2019/11/30 at 8:23 PM
Share
9 Min Read
types of insurance policy
SHARE

Insurance is not a luxury but a necessity. It is a hedge or protection against unforeseen or unpredictable events. We can’t predict when or if a disaster would occur but insurance can provide some comfort in the event that it happens. Insurance gives peace of mind because you know that you are protected against the unexpected. There are different types of insurance policy available today and almost everything can be insured. However, some types of insurance policy are more deserving than others of a place in your financial plan. The right insurance to purchase is always determined by your specific situation like age, children , lifestyle and employment benefits.

Despite the numerous insurance options and the confusion it may bring, experts have recommended four must have insurance policies for everyone. These include: life, health, long term disability and auto insurance. Every one of these covers an important aspect of your life that is important to your financial future.

types of insurance policy

 

- Advertisement -

 Types of Insurance Policy Everyone should own

Life Insurance Policy

This insurance policy is important if you are married or have kids but single people can still benefit . It ensures that your family, or dependants are provided for when you die. Death could come unexpectedly or timely but having a life insurance ensures that those you left behind, face little difficulty in moving on with their lives. For someone single, it could help pay off debts left behind and funeral expenses.

This insurance policy according to experts should be able to cover at least ten times your yearly income. This will enable the ones you left behind cover existing expenses, funeral expenses, and have money left to live on.

It is important when estimating the coverage amount to also factor in expenses like mortgage payments, credit cards, loans, child care and future college costs.

Two basic types of life insurance policy include; the Term life and the Permanent life. In Term life, your policy is for a specified amount of time, but in Permanent life it only terminates on your demise. The term life seems less expensive and more flexible, but permanent life allows you to build cash flow that you could borrow against or invest. You should consult an expert when deciding on the option as there exists considerable differences between both types.

Most employers have life insurance policy for their employees, so check it out with them first and decide whether you want an additional coverage.

In most types of life insurance, your age and health status would determine if you would get coverage. You should be prepared for a medical examination as part of the application process. However, there are a few insurance companies that offer this without medical exams, but the premiums are usually higher.

types of insurance policy

Health Insurance

This is one of the most important types of insurance policy to have. Without good health you will be unable to work and earn an income, and also enjoy life. A serious ailment or accident could happen and without insurance coverage you may be unable to receive treatment.

In a recent Harvard study, it was noted statistically that “ Your family is just one illness away from bankruptcy ”. That study also disclosed that in 2007,  62% of all bankruptcies in the US were as a result of health problems. 78% of these had medical insurance at the onset of their illness.

These statistics provide enough reasons to take health insurance more seriously and even when you already have a policy in place, should work on upgrading it. Even a minimal coverage is better than none as a result of the escalating costs of health care.

Many employers also offer health insurance benefits to full time employees and some even cover part time employees too. You should check out the status of your health insurance coverage with your employer and consider if it is enough to cater for your family’s needs. It may be wise to have an additional coverage in place if in the event that you consider it inadequate.

For people whose employer don’t offer health insurance cover or self-employed persons, putting in place your own cover is very necessary. The good news is that health insurance premiums that are paid out of pocket is tax deductible.

 

Auto Insurance

It makes sense for everyone who owns an automobile to make this one of the mandatory types of insurance policy to own. A car is an asset and this insurance policy would protect it in the event of theft or accident. An auto insurance also covers damages to the other vehicle, medical expenses and even legal costs.

Without an auto insurance and in the event of an accident, you may have to borrow or use your savings to cover the costs which may be substantial depending on the circumstances.

So many states in America make auto insurance mandatory and flouting the law could lead to serious penalty and fines.

In 2009, there were over ten million traffic accidents in the U.S resulting in death of 33,808 people, according to data by Fatality Analysis Reporting System (FARS).  Auto accidents was also the number one cause of death for Americans aged between 5 and 34. Over two million drivers and passengers got treated in emergency rooms with the total costs of these accidents estimated at around $70 billion.

types of insurance policy

 

Long – Term Disability Insurance

A lot of people see this as one of the types of insurance policy that is not necessary. This is because no one assumes that they will ever be disabled. However, according to statistics from the Social Security Administration, three in every ten workers entering the workforce will become disabled before their age of retirement.

A good health insurance policy would cover health costs. But it would not cover living expenses in the event that one is unable to continue working; or stop work for extended periods of time due to disability. You will still need to cover the usual expenses that your paycheck would normally take care of. This is where the Long- Term Disability Insurance becomes useful. A major medical condition like cancer could result in the inability to work for over a year. And where there are expenses like mortgage payments and loan repayments to make, savings will most likely become inadequate.

Statistics show that;

  • Almost 50% of all mortgage foreclosures were caused by disability
  • Nearly 90% of all disabling accidents and illnesses weren’t work related
  • 498 Americans become disabled every 10 minutes

Several employers ensure that there is short term or long term disability coverage for their employees. Check this out and if not satisfied, put in a place an adequate one with a private insurer.

An adequate policy should guarantee income replacement or at least 50-60% of your monthly income.  Average insurance rate for group or employer coverage in 2009 was $ 238 per annum, which is considered affordable.

 

Conclusion

Insurance could seriously eat into your budget but being without it could result in financial ruin. We covered the types of insurance policy everyone should own, which were life, health, auto and long-term disability. Some of these may have already been provided by your employer ; so always check there first before deciding the next steps, if it doesn’t exists or is inadequate.

Insurance can be expensive but the expense of living without it could be outrageous.

 

You Might Also Like

How to Get the Most Out of Your Car’s Warranty

 How to Use Life Insurance to Build Wealth

How to choose the right box truck insurance partner for your trucking business

Four Tips for Finding the Right Business Insurance Policy

Discover The Most Popular Disadvantages of Captive Insurance

TAGGED: Insurance, Insurance policy

Sign Up For Daily Newsletter

Keep up! Get the latest breaking news delivered straight to your inbox.

By signing up, you agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. You may unsubscribe at any time.
Kreg Bale November 30, 2019
Share this Article
Facebook Twitter Whatsapp Whatsapp LinkedIn Email Copy Link Print
Share
Previous Article things to consider when buying a house 12 Most Important Things to Consider When Buying a House
Next Article A guide to earn some money losing weight at any age A guide to earn some money losing weight at any age
2 Comments 2 Comments
  • Pingback: How To Maximize Your Financial Compensation In Personal Injury Cases
  • Pingback: Your Guide to Finding the Right Type of Disability Benefits

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

- Advertisement -

Latest News

Jobs Available in Finance Customer Service 
Jobs Available in Finance Customer Service 
Jobs January 26, 2023
Is Electric Utility Central A Good Career Path
Is Electric Utility Central A Good Career Path? 
Business Jobs January 26, 2023
How to manage a crypto portfolio
How to manage a crypto portfolio 
Business Cryptocurrency December 22, 2022
How Many Jobs Are Available In An Integrated Oil Company
How Many Jobs Are Available In An Integrated Oil Company 
Business December 22, 2022

You Might also Like

How to Get the Most Out of Your Car’s Warranty
Insurance

How to Get the Most Out of Your Car’s Warranty

October 6, 2022
 How to Use Life Insurance to Build Wealth
Insurance

 How to Use Life Insurance to Build Wealth

September 22, 2022
box truck insurance
Insurance

How to choose the right box truck insurance partner for your trucking business

September 21, 2022
Finding the Right Business Insurance Policy
Insurance

Four Tips for Finding the Right Business Insurance Policy

August 23, 2022
//

We educate over 20 million users on personal finance, wealth and asset management through our network of finance blogs

Sign Up for Our Newsletter

Subscribe to our newsletter to get our newest articles instantly!

Financial Slot
Follow US

© 2022 Financialslot.com. All Rights Reserved.

Removed from reading list

Undo
Welcome Back!

Sign in to your account

Lost your password?