When it comes to buying insurance , there are so many options on the market that you might not know which is necessary and which is not necessary . Paying for too much insurance takes money away from other areas, such as your emergency fund and your retirement savings. Protecting your most important assets is an important step in creating a solid personal financial plan. The right insurance policies will go a long way toward helping you safeguard your earning power and your possessions.
When it comes to insurance, there are basically five types that everyone needs.
1. Disability insurance : Disability insurance is meant to provide income should you be disabled and unable to work. Social Security Administration estimated that over 25% of today’s 20 year olds will be disabled before retirement. If you are relying on your income to live, you should have disability insurance. Most people who are traditionally employed should be able to secure a policy through their employer, while people who are self-employed will have to take out an individual policy. Some people may prefer the increased coverage provided by buying private policies to supplement those from their employers .
2. Life Insurance : No one likes to think about it, but life insurance is an essential component of protecting your family in the event that you pass before your time . If you have dependents, such as a spouse or children or even your elderly parents, who rely on your income, life insurance is a necessity. What a life insurance policy will do is guarantee to these parties a set amount of income for some stated period of time in the event that you die.
3. Health Insurance : The soaring cost of medical treatment is reason enough to make health insurance a necessity. Even a simple visit to the family doctor can result in a hefty bill. More serious injuries, that result in a hospital stay, can generate a bill that tops the price of a one-week stay at a luxury resort. And, should a family member need care from an NDIS Service provider in Sydney, for example, this can also be a costly sum to have to find each month. Although the ever increasing cost of health insurance is a financial burden, for just about everyone, the potential cost of not having coverage is much higher.
4. Automobile Insurance : Auto insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy. Auto insurance provides property, liability and medical coverage
5. Property Insurance : provides protection against most risks to property, such as fire, theft and some weather damage. When it comes to insurance for your physical property, you want to make sure to get a policy written on an all-risk basis rather than on a named-peril basis. While the latter only covers the specific perils named in the policy, an all-risk policy will cover you for virtually anything .
These 5 kinds of Insurance are mandatory for every one at any age or at any Stage . Make Sure you insure all the five kinds of Insurance to live with Peace of mind .