Home, automobile, and life are just three of the various kinds of insurance policies that are available for consumers. Insurance, of all kinds, is used to help protect consumers when certain things happen. For the most part, this protection comes in the form of money. It can also provide protection from liability, damages, and financial loss, but in the end, it usually comes down to money.
Why is insurance important?
- It gives peace of mind: You know you won’t have to pay big amounts out of your own pocket for unexpected things like death, accidents or illnesses;
- You manage risks: if something happens to you/your vehicle or home your insurance will cover a portion of the costs if not all the costs;
- You save on taxes;
- If you are buying a vehicle using financial aid, you are required to take out automobile insurance
What not to do?
- Don’t get multiple polices for the same type of insurance for example, multiple life insurance policies will not mean they will all pay out; in fact, you can only claim from one policy;
- If you are in a vehicle accident and are not the cause, you can only claim from either your own or the responsible party’s insurance. (Claim from theirs to save on your own, if they have)
Recommended types of insurance:
- Home insurance: If you own a house, be sure to insure it to help against unexpected events such as a burst geyser that burst or a fire
- Life insurance: If something happens to you then your loved ones are still taken care of and the necessary bills are taken care of;
- Health insurance: There are many different types so be sure to speak to a qualified fsp this will cover most health and or hospital problems;
- Disability insurance: Accidents can happen quickly leaving you disabled and unable to continue with your job, if you can’t find something else soon then you will have no income. This helps relieve some of the stress, but it takes a while to take effect so be sure to have an emergency fund as well;
- Pet insurance: Pets are part of our family, so it is devastating if something happens to them. This will cover their unexpected veterinary expenses;
- Vehicle insurance: Its not always about how safe you drive but all the other vehicles on the road as well. Be at ease knowing you are covered should they not keep their eyes on the road;
- Travel insurance: It would be terrible if you are on holiday and something happens like a robbery leaving you stuck in a foreign country. This protects you against any such inconveniences. Only acquire this when you are planning a trip to any foreign country;
- Business insurance: There are various policies covering various aspects so make sure you get a policy that covers all your needs, no matter how small the company.
Insurance that is not recommended:
- Life insurance for children: it’s a terrible thing when a parent surpasses a child but unfortunately if they don’t earn an income contributing to the family then life insurance on them does not make sense. The money would be better saved in an emergency/ education or savings fund;
- Credit card insurance: The benefits are very limited, and the money would be better spent paying off any debt and you will save on interest;
- Mortgage life insurance: This is to help your family pay the mortgage and some other small bills, when something happens to you. A good life insurance policy will have this included. It can be a good idea if you are ineligible for a term life insurance;
- Cancer and other disease insurance: Unfortunately, medical insurance policies have holes in their coverage. It might seem like a good idea to help cover the gap, but they are very specific and don’t necessarily cover everything related to the disease. For example: A cancer disease policy may not cover any type of skin cancer which is the most common of the disease. You would be better off by improving your current health insurance.