Insurance is jokingly compared to lugging around an umbrella. It’s a pain to carry, but you sure are glad when you need it. With seemingly unlimited options, insurance can be complicated. Below are some policies you don’t want to be without.
AUTO
Auto insurance has various coverages. At a minimum, you must carry liability coverage for bodily injury of $15,000 per person / $30,000 per accident and property damage of $5,000 per accident. You’re on the hook for costs exceeding your coverage limits so most opt for much higher limits. Tip: Choose a higher deductible for the lower premium. You want coverage for major damages, not for minor repairs. Claims typically boost your premiums so avoid submitting claims for small fender benders.
HOMEOWNERS / RENTERS
If you are a homeowner, make sure your policy includes “extended dwelling coverage.” It covers replacement of your property even if the costs exceed your policy’s coverage. There is a limit to how much is covered – usually 20 to 25 percent above the amount of your policy unless you opt for more coverage.
Earthquake insurance is now surprisingly affordable. If it’s been years since you received a quote, it is worth checking into given where we live.
If you are a renter, get renters insurance unless you have money to replace your belongings. A low-cost policy covers you in the event of a fire, burglary or other disasters.
UMBRELLA
An umbrella policy is an inexpensive way to protect your assets from major claims and lawsuits. It covers you above the limits of your homeowners and auto insurance policies. If your net worth is over $500,000, get an umbrella policy. For only a couple hundred dollars annually, you could boost your liability coverage by $1,000,000.
HEALTH
If you are under 26, you can stay on your parents’ health care insurance. Once you reach age 26, you need your own policy to cover the high costs of health care. An option to consider if you don’t frequent the doctor often is a high-deductible plan combined with a health savings account. Your monthly premium is lower but knows that you’ll front more of your health care costs as a trade-off.
TERM LIFE
If you passed away unexpectedly, how would your family make ends meet? A term life insurance policy for 10 to 12 times your yearly income will help your family pay the bills, save the house and pay for college. Just as the policy name signifies, you choose the term of coverage – typically 10, 20 or 30 years. Ideally, the term ends around the time that your kids are on their own and your mortgage is paid off.
LONG-TERM DISABILITY
This policy protects you from loss of income if you are unable to work for a long period of time due to illness or injury. If you rely on your income to live, you should have long-term disability insurance.
LONG-TERM CARE
To protect your retirement savings, long-term care insurance covers a range of services that are likely needed in your later years, such as nursing and in-home care. Long-term care costs are expensive and generally not covered by Medicare. To find the right policy, consider your health, heredity, availability of family caregivers and personal preferences. Premiums climb as you age, so ideally you want to get in before age 60. Premiums aren’t cheap but are likely cheaper than the costs your policy later covers.
THE BOTTOM LINE
Everyone’s needs differ and as life changes – so should your insurance coverage. Shop wisely and ask questions if you don’t understand. It’s important to have policies that are right for you.
Author: Chris Thornburgh
Source: TBC Media
Retrieved from: www.bakersfield.com
FINRA Compliance Reviewed by Red Oak: 594299