Unexpected
losses can put the best-laid financial plans in turmoil. Insurance
coverage is necessary to protect against unexpected costs, property loss, and
disability. There are no universal answers to the question of how much
insurance is enough. Situations vary.
A
single 22-year old, unmarried, in perfect health, without dependents has
different needs than a 35-year old working mother of four. But both certainly
need insurance coverage.
Some
types of insurance are expensive, but that doesn’t mean they’re unnecessary.
It’s important to determine your needs before comparing policies.
Consider
these insurance buying mistakes:
1. Choosing deductibles that are too
low. By doubling
your deductible, you could cut your monthly premium by a third. Save the extra
money in your savings account. If you do have a claim, you’ll have the extra
available to cover the higher deductible. If you don’t have a claim, it’s money
in your pocket.
·
This
applies to many types of insurance coverage. Compare deductibles and premiums. Do
the math and make an informed decision.
2. Opting for COBRA. The government has given you the
right to continue with your employer’s health coverage for up to 18 months
after leaving your job. But you’re required to pay 102% of the premium.
·
You
can find a better deal on your own. Shop around and find a cost-effective
medical plan. Employer-sponsored plans are overkill for many.
3. Only carrying enough homeowner’s
insurance to cover the market value.
This is particularly true if you live in an older, larger home. It might cost
far more to rebuild your home than it’s worth on the open market. Ensure that
you’re covered for the rebuilding cost of your home.
4. Buying life insurance when you
don’t have dependents.
It’s challenging to think of a reason for carrying life insurance when you’re
single and dependent-free. Life insurance isn’t necessary for everyone. Avoid
paying for policies that you don’t even need.
5. Buying life insurance coverage
for your children.
Unless you’re financially dependent on your children, it doesn’t make sense to
insure them. Life insurance is to financially protect the people that are left
behind. If you’re children aren’t contributing financially, avoid insuring
them.
6. Failing to review a company’s
complaints. It’s
not all about the premium. Saving a few dollars each month might not be
worth the hassle when it comes time to make a claim. See how other
insurance customers rate their experiences. Paying a couple of dollars more
each month might be worth it.
7. Failing to review all the options
each year. It’s
common to stick with an insurer for decades. Avoid letting the past determine
the future. Review all of your insurance policies each year. You’re bound to
find at least one better option.
8. Only shopping by premium cost. The monthly premium is often the
only factor considered by those searching for a policy. But what are you
actually getting for that premium? Remember to review the deductible and all the
benefits the policy provides.
·
Avoid
paying for features you don’t need.
9. Failing to buy disability
insurance.You’re
at least 5 times more likely to be disabled than to die, regardless of your
age. How
will you pay your bills and care for your family if you’re unable to work?
Disability insurance can be expensive, but it’s one of the most important
policies to carry.
Avoiding
mistakes is an effective way to ensure success. Insurance can be expensive, but
shopping around can make the necessary coverage more affordable. Determine your
needs and purchase insurance intelligently.
No hay comentarios.