Unexpected financial losses may occur in your lifetime, but taking out an insurance policy may help you prepare for such issues down the road. Insurance policies serve to help protect people and those that they love.
Life is unpredictable and fleeting, and people can become ill or die suddenly and tragically. For peace of mind, many experts agree that people should take out a life insurance policy, as well as other types of insurance coverage. Here, we will discuss the different types of insurance coverage that everyone should have.
Benefits of Insurance Policies
The future is uncertain, and you will likely run into obstacles and other issues as you age. Insurance is thus available to help you deal with circumstances down the road. It will help you manage financial losses in the future, whether or not you were directly or indirectly responsible for said losses.
Insurance will provide comprehensive protection for you and your loved ones. It will help reduce stress during trying times so that you can focus on other, more pressing matters. Also, financial security will be obtained with insurance coverage, and you will also have a legacy to leave behind.
Death is an unfortunate, but inevitable part of life. When you pass, you can have the peace of mind knowing that your loved ones will be taken care of financially.
Important Policies Everyone Should Have
A life insurance policy will provide between 10 to 12 times your yearly income in the event that you die. Your family won’t have to worry about losing their home or having to get a second job in order to make ends meet.
Vehicle insurance is also mandatory under the law. As well, according to the Insurance Information Institute, the average loss per claim on a vehicle is nearly $5,000. If you do not want to worry about having to pay such an amount out of pocket, then vehicle insurance is a must.
The importance of motorcycle coverage should not be forgotten, since many North Americans ride motorcycles and other related vehicles in order to get around.
Health insurance is also essential. According to the Kaiser Family Foundation, nearly half of all bankruptcies that are declared in the United States are due to medical debt. If you do not have any health insurance, then a sudden accident or illness may cost you hundreds of thousands of dollars in the form of surgery, medication, and rehabilitation.
As for home insurance, ensure that your policy also includes dwelling coverage that is extended. The additional coverage will provide you with another layer of protection that goes above and beyond your policy limits. As well, speak to your agent in order to determine if your coverage also includes earthquake and flood damage, as many policies do not.
Different Rating Factors That Affect Your Monthly Premium
Mature drivers tend to have fewer accidents than their younger counterparts. Most insurance companies will charge teenagers, or those that are under the age of 25, more than older adults. Expect to be charged more during the first 10 years of your “driving career” due to your limited experience.
Your gender will also affect how much you will pay. Statistically speaking, women tend to not only have fewer accidents than men, but the accidents that they are involved in also tend to be less serious. Women are also less likely to be implicated in DUIs. Due to these factors, women tend to pay less for their insurance.
Where you park your car may also impact your bottom line. For example, you may pay less if you park your car in a secure garage versus parking it on the street.
Urban drivers tend to pay more than rural drivers, as urban areas often report higher levels of vandalism, accidents, and theft each year.
Your previous personal history may also have an impact. For example, if you have a history of health problems, then you may pay more.
Furthermore, you may have to pay more if you have a poor driving record. Serious traffic violations and a record of accidents will likely cause your rates to rise. If you are a new driver that does not have an insurance track record, then you will also be asked to pay more due to your lack of experience.
Your marital status may have an impact on how much you pay. While it may seem unfair to single people, some companies consider them to be a bigger risk. According to some studies, married or common-law couples tend to get into fewer car accidents, so they are seen as a lower risk.
However, some insurance companies do not use marital status as a factor in order to determine premiums, so speak to a broker in order to find a plan that meets your unique needs and lifestyle choices.
Other factors that may impact your premiums include your credit score. Some insurance companies believe that a person’s credit score accurately reflects their level of responsibility and trustworthiness. A poor score may indicate a higher level of risk, and studies have found that people with large amounts of debt are more likely to file claims.
Company loyalty may also help lower your premiums, so we would suggest that you stay with your current provider for at least 2 years before you start shopping around for another one.
Better Safe Than Sorry
If you want to avoid massive financial losses, and ensure that your loved ones are taken care of should something unexpected happen, then taking out an insurance policy is a must.
Not all plans are created equal, so it may be in your best interest to speak to a financial advisor or an insurance broker in order to determine which plan will cater to your unique family dynamics and lifestyle.
You should also consider rating factors and how they may impact the premiums that you pay. Life insurance, as with life, is serious business, and is not something to be trifled with.
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