Life throws many unexpected things at us. When that happens, we
can't stop those things from occurring, but we can give ourselves a bit
of protection through insurance. Insurance is meant to give us financial
protection should a disaster happen. So many different insurance
coverage's and policies are available that it might seem overwhelming
for you to understand. The truth is some of these insurance policies are
not essential. So let us discuss the four types of insurance everyone
should have.
Health Insurance
A recent Harvard University
study concluded 62 percent of bankruptcies in the U.S. were caused by
health problems. The study also found 78% of those who declared
bankruptcy had medical insurance when their illness started.
Finding
affordable health insurance is a bit difficult, particularly if you are
not in an employer-sponsored program or if you have a pre-existing
condition. Health insurance has become a luxury that fewer and fewer
people are able to afford. For an employee in an employer-sponsored
program to obtain the most comprehensive insurance, he or she must spend
more than $5,000 in premiums.
The cost of a hospital stay is
around $900 to $2,000. So investing in health insurance, even with
minimal coverage, is better than having none at all.
Life Insurance
If
your family is dependent on your salary to pay the bills, it is very
important you have life insurance. A typical life insurance policy
should cover at least ten times your annual income. This sum will
provide enough money to cover existing expenses, funeral expenses, and
give your family financial support when you leave them behind. To get
the most out of your insurance coverage, remember that it does not just
cover your funeral expenses. It also covers your mortgage payments,
living expenses, child care, and future college costs.
The two
types of life insurance are traditional whole life and term life.
Traditional whole life is a policy you pay for until you die. Term life
is a policy with a set amount of time. When deciding between traditional
and whole life, consider your age, occupation, number of dependent
children and other factors to ensure you get the coverage necessary to
protect your family.
Homeowner's insurance
Homeowner's
insurance covers your home in an event of an accident or (in some cases)
an "Act of God." When you obligate yourself to borrowing tens of
thousands of dollars for 15 to 30 years, you need homeowner's insurance.
Also, you might need flood, earthquake, or other specialty coverages in
your policy.
Auto Insurance
Traffic accidents are common.
The U.S. has more than 10 million traffic accidents every year and
33,808 people die from them. Traffic accidents also are the number one
cause of death for people between the ages of 5 and 34.
If you
drive with auto insurance and have an accident, the fines will be
covered by your auto insurance company. If your car is damaged due to a
car accident, auto insurance also will cover the repairs. It also will
pay the expenses if your passenger or the other driver gets injured in
the accident.
