Your Personal Insurance Checklist What Do You Really Need

Thursday, January 3, 2013

Your Personal Insurance Checklist What Do You Really Need

Personal insurance policies are similar to credit reports, in that they must be checked regularly for accuracy. In addition to accuracy, your insurance policies must also be updated to include new family members, new circumstances, and changing economic conditions, both at home and in the marketplace.

Basic personal insurance policies include automobile, home, life, travel, and health coverage. Simply knowing what they are, however, is not adequate to ensure your protection in case of accident, injury, or other types of loss.

Automobile Insurance

Legally, nearly everyone is required to carry automobile insurance to drive on public roads. Car insurance covers bodily injury, property damage, collision, medical costs, comprehensive coverage, underinsured/uninsured motorist (UIM/UM) coverage, and may include roadside assistance. Liability coverage pays for damage you do to another. Collision pays for damage done to your car as a result of an accident, whereas comprehensive coverage refers to damage done to your vehicle from other than an accident, such as fire, vandalism, or theft. 

Some places include windshields in comprehensive coverage while others do not. It is important to find out what your policy does and does not cover. The bottom line to consider when purchasing or updating your auto insurance policy is to consider what you can afford to pay with your own funds, in the case of an accident. In light of escalating medical costs, your financial situation can be severely compromised if you do not have adequate insurance coverage.

Life Insurance

The movies all tout the benefits of life insurance, but it is important to understand what you are buying with your premiums. Life insurance policies generally fall into two categories: term and permanent. Term life insurance provides coverage for a specified period of time. Beyond that time frame, no benefits are paid. Permanent insurance remains active, accumulates a cash value, and can be categorized as universal, whole life, endowment, or limited pay. To determine the best life insurance policy for you and your family, it is necessary to talk with a skilled agent on a regular basis to ensure that you have the coverage you need.

Homeowners Insurance / Renters Insurance

If you own your own home, homeowners insurance, also known as hazard insurance, can protect your home, its contents, and yourself from liability in the case of someone being injured on your property. As property values, medical costs, and the contents of your home change, you will need to update your home policy to reflect these new values.

 If you have recently purchased a home, mortgage life insurance is worth looking in to. This type of policy pays off the mortgage if the policy owner dies, allowing the family to retain ownership of the home without the burden of costly mortgage payments. If you are a renter, it is still a good idea to protect the contents of your home and yourself against liability claims.

Travel Insurance

Travel insurance is normally very inexpensive and worthwhile. Not only can it help offset the costs related to luggage and delayed or cancelled flight claims, it can also help in the event of a crash. Travel insurance helps pay the costs of transporting remains, funeral expenses, and any related costs, such as meals and hotels.

Health Insurance

Health insurance has become a politically controversial issue, and with good reason. Medical costs have skyrocketed, and a simple injury or illness can devastate a family financially, physically, and emotionally. Unlike a health plan, which is a subscription-based medical care program normally offered through one's place of employment, medical insurance comes in two varieties: scheduled and comprehensive. 

While scheduled medical insurance assists in providing regular, preventative medical care, comprehensive medical insurance pays a percentage of your medical costs, making a trip to the hospital far more affordable. The argument for adequate medical insurance can be seen most clearly when one looks at the statistics. Sixty-two percent of the 2007 bankruptcy cases were directly related to medical problems. Also, 25% of Americans will be hit with some type of disability before reaching retirement age. If you are like the majority of Americans who live pay check-to-pay check, a medical disability can be financially devastating.

Disability Insurance

One frequently overlooked type of policy is disability insurance. Disability insurance replaces 40-60% of your income when you are unable to work due to illness or injury. Since 95% of disabilities occur outside of the workplace, many people are left facing this loss of income, combined with additional medical expenses, without enough help. If your disability is covered under Social Security Disability Insurance, it can take two years or more before you received benefits. Also, the average SSDI monthly payment is only $1065 and can be as low as $500. For most families, this is simply not enough, making disability insurance a worthwhile investment.

Making a point of checking on your personal insurance safety umbrella on a regular basis can help avert financial difficulties. Insurance is a small price to pay for peace of mind and financial security.

About The Author: 

Mitchell Nelson writes for, which offers comprehensive disability coverage options from unbiased, professional long term disability insurance providers. Their team has over 120 years of combined industry knowledge and experience, and is committed to providing exceptional service. Find on Google+

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