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Insurance Made Easy: A Guide For The Consumer
By: Cori Fox
For most of us, insurance coverage represents a love-hate relationship. We hate
paying for the premiums, but love having the right kind of coverage when it is
needed. We realize that is important to have insurance coverage, but just the
thought of contacting different insurance agents, or researching different
insurance plans, can not only be a scary experience, but incredibly
overwhelming. Knowing what types of insurance are available, and making sure you
have the correct coverage for your life’s needs is a task that should be given
careful consideration.
Using the following suggestions, whether you are a novice or a veteran insurance
buyer, will help you to make critical insurance coverage decisions. First and
most important, is to ask yourself the question; what kind of insurance do I
need? There is auto insurance to protect yourself and others when driving.
Health coverage is a vital issue to address, as well as life insurance,
disability and long-term health care. If you have a home, you need to protect
your most valuable possession with home-owners insurance. There are many types
of insurance for each of the categories mentioned. Asking the right questions
can make all of the difference in deciding on the policy that fits you best.
Auto Insurance
Auto insurance is required in most states. You may not be required to carry full
coverage, which includes collision, comprehensive and medical coverage; but you
are required to carry liability coverage. Liability is the foundation of any
auto insurance policy. If you are at fault in an accident, your liability
insurance will pay for the bodily injury and property damage expenses caused to
others in the accident, including your legal bills. However, if your vehicle is
damaged, the expense to repair it will not be covered without having a full
coverage policy. Collision, comprehensive and medical coverage are for your
benefit. Collision will pay for the repair to your vehicle, while comprehensive
coverage will pay for damages to your car that weren’t caused by an auto
accident. Medical payments coverage will pay for you and your passenger’s
medical expenses after an accident. This coverage will pay no matter who is at
fault.
Collision coverage is usually the most expensive part of a policy, you can
choose a higher deductible, say $500 or $1000, and keep your premium costs down.
If you have a newer vehicle and have a lien against it, the lending institution
will require that you have full coverage. By working with a professional
insurance agent, the agent would be able to give you many cost saving
suggestions that you could take advantage of to lower your rates, and still give
you the coverage you need.
Health Insurance
Health insurance is one of the largest expenses that we face today. Educating
yourself about the different types of health insurance available will assist you
with your insurance buying decision. There are many types of plans, but
essentially two kinds of health insurance: Fee-for Service and Managed Care.
Fee-for-Service assumes that the medical professional will be paid a fee for
services provided. Managed Care encompasses various plans and can include:
health maintenance organizations (HMOs), preferred provider organizations (PPO),
or point-of-service (POS). These plans provide comprehensive health services to
their members and offer financial incentives to their members to use providers
in their network. Health insurance is one of the least understood types of
insurance; many people feel they do not need health coverage, but just one major
illness or accident can force you into bankruptcy when you can’t pay your bills.
This is why you need to understand all the different types of plans available
and what plan would best suit your needs and budget. Meeting with an insurance
professional and asking the right questions, can save you many sleepless nights
of worry and provide you with some peace of mind.
Life Insurance
There are some basic things to consider when you are assessing your life
insurance needs. You should first consider your financial situation and the
standard of living you would want your dependents or survivors to maintain.
Would you want a policy that would cover funeral expenses and final medical
bills, or do you have a family to consider where your coverage would also pay
outstanding debts, child-rearing expenses, and educational costs? There are two
main types of life insurance available. They are Term Life and Permanent or
Whole Life.
Term provides death benefit protection for a specified period of time. You can
buy a policy in increments of 10, 20 or 30 years. These are usually less
expensive, but your rates can increase each time you renew your policy. With
Permanent, the costs of the policy are stretched out over a longer period of
time, usually spread out over your entire life. Permanent can also be used as a
savings vehicle. Once the premium has been paid, the company invests the
additional funds. It’s a very important choice as to what insurance company you
choose. A knowledgeable and experienced agent can answer all of these and your
personal questions about life insurance.
Disability Insurance
Is disability insurance really necessary? Many of us can easily become sick or
disabled tomorrow and not be able to work for two or three months. Would you
have enough savings to cover your living expenses? There are two types of
disability insurance. Short term and long term disability.
Short term will pay you a percentage of your salary for a short period of time.
These policies are usually not very expensive, and usually cover a period of
three to six months. Long term disability insurance picks up where your short
term leaves off. Long term will pay a percentage of your salary until you are 65
years old. Disability insurance can be costly when you by it on your own, but it
should be a part of everyone’s financial plan. It could easily be argued that
you need disability coverage more than life insurance.
Long-term care Insurance
Another form of insurance that people around 50 years of age should consider is
long term care insurance. There are many confusing forms of this insurance, but
it essentially covers costs you would incur when you can no longer perform
activities of daily living, such as dressing yourself, bathing yourself, or the
need of skilled nursing care at home or in a care facility. Medicare and
Medicare supplemental insurances don’t cover most long term care expenses. This
is a very important insurance, you would need the help of an insurance
professional, one who specializes in long term care insurance, to make sure you
have the best coverage to fit your long term care needs.
Homeowner’s Insurance
If you are a homeowner and you have a mortgage on your home, your lender
requires you to have homeowner’s insurance. There is much more to consider than
how much your coverage will cost, you need an adequate policy that will give you
the right level of protection; plus special provisions for your valuables and
other possessions. You may need additional coverage for things such as
earthquakes or floods. Before you get a policy, you will need to take an
inventory of what you have in your home. Know what your insurance limits are,
learn the difference between replacement-cost and actual-cash-value coverage.
Again, consulting with an insurance professional and one who will listen and
understands your specific needs is essential.
With all of the different types of insurances available, it is best to be
prepared when selecting a policy. Choosing the wrong insurance policy can have
disastrous consequences for both you and your family. There are many decisions
that need to be made when looking for insurance, such as deciding what type of
insurance you would need, and also considering what you can afford. You want to
be able to speak to an insurance agent who will not pressure you or try to sell
you insurance coverage you do not need. A professional can suggest and compare
different plans and advise you which plan would best fit your own unique needs.
All the while, offering this service at no cost to you.
About the Author:
Article was written by
http://www.mostchoice.com/. MostChoice is a free national
service which speeds up and simplifies the process of finding insurance, real
estate, and financial products by connecting consumers with expert agents and
brokers in their local area. Reproductions of this article must include a link
back to http://www.mostchoice.com/ |
