The key purpose of insurance is to help us protect the things that are most valuable to us – be it health, life, home, or car. By having the required insurance plans in place, you can ensure a secure and healthy financial future for you and your loved ones.
In this blog, we will talk about the insurance policies that are fundamental for everyone.
4 Must-Have Insurance Policies for Everyone
Life Insurance
A life insurance policy helps protect your loved ones that are financially dependent upon you, in your absence. If you feel that your demise would lead to financial problems for your children, spouse, or parents, life insurance should be a priority for you. Calculate your yearly income and the expected number of years that you will stay employed, and then buy a life insurance plan that will emulate that income in case of your untimely death. Make sure to also incorporate the burial or funeral costs in your calculations.
Homeowner’s Insurance
Your home is perhaps the biggest investment you will make during your life, and you should take all possible steps to protect that investment. If you find that you have to replace your house, a homeowner’s insurance plan can considerably reduce the burden associated with this process. Ideally, your insurance policy should cover both the contents and the structure of the house, as well as the additional cost of living elsewhere during the house-reparation period.
The rebuilding cost need not factor in the price of the land, since you are already the legal owner of the land. To obtain a fair estimate of the rebuilding cost, look up the per square foot cost charged by local builders, and multiply the amount by the number of square feet that you will need to replace. You will, of course, also have to incorporate the cost of any special features or upgrades.
Renter’s Insurance
Renter’s insurance is essentially a type of a homeowner insurance policy that is granted to those who lease or rent properties. A renter’s insurance plan will cover the costs of liabilities, extra living expenses, and personal belongings.
Both renter’s and homeowner’s insurance have the same components:
- Coverage A (dwelling)
- Coverage B (other structures)
- Coverage C (personal property)
- Coverage D (additional living costs)
- Coverage E (liability)
- Coverage F (medical payments)
Since a renter is not responsible for insuring the structure or dwelling, the first two coverage types (A and B) are set at $0.
Auto Insurance
Most states require at least a level of auto insurance. Even if it is not required (and even you do not feel that your car deserves to be insured), auto insurance should certainly not be ignored. If you run into an accident and injure someone or harm their property, you might find yourself on the receiving end of a substantial lawsuit.
Comprehensive auto insurance can play a key role in covering these costs and keeping you from losing everything that you own.
Umbrella Insurance
Umbrella insurance offers additional coverage beyond the existing coverage and limits of other specific policies.
For instance, let us assume that you run into a car accident that ends up costing you $400,000, and your auto insurance maxes out at $250,000. Now, an umbrella insurance policy could have covered the $150,000 difference, and kept you from having to pay that amount out of your own pocket.
Umbrella insurance can be used for covering property damage, injuries, personal liability, and certain types of lawsuits.
Final Word
To sum up, the right insurance policies help you take away some degree of uncertainty from your future as well as the futures of your loved ones. To learn more about the right insurance policies for you, please feel free to reach out to us and schedule a consultation.
