A quality health insurance plan is a major perk for employees. However, many employees don’t understand how their medical benefits work. Health
Insurance: Protecting Your Cars, Home, Health and More
It can be hard to understand the value of insurance until you really need it. You pay the bills for months or years, never feeling like you get much in return. The truth is, insurance is one of the most important parts of any successful financial plan.
Accidents happen, and by nature they are unpredictable. A single car accident, fire, or even an unforeseen death can wreak havoc on a financial situation if there isn't proper insurance protection.
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Most people's introduction to insurance comes when they first start driving. While it's tempting to purchase the cheapest policy available to save a few bucks, this strategy can be a disaster as you age and gain more assets. If you are found at-fault for an accident that exceeds your coverage limits, you could potentially lose your home and your life savings.
Your home is likely the biggest asset you will ever own, so make sure and protect it. If you carry a mortgage, your lender will require adequate coverage. If you pay it off in the future, make sure to keep your policy up-to-date and reassess the value of your home, belongings, and building costs to keep up with inflation.
Whether you want to talk about it or not, people die. Sometimes unexpectedly. If your family relies on your income to pay the bills, a good rule of thumb is 10 times your annual salary in term life insurance coverage. If you are a stay-at-home parent, think about what it would cost to replace things like child care, cleaning, grocery shopping, etc. while the kids are still at home.
When determining your coverage, do not forget to count debt from things like credit cards and personal loans.
Adequate car and home insurance coverage limits are a good start, but the best bang for the buck is an umbrella insurance policy. For a few hundred dollars a year, you can extend your car insurance and home insurance limits by $1 million or more. As your assets grow, insulating you and your family from financial ruin with an umbrella policy should be a no-brainer.
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