Best Insurance policies you must have for your family

October 26, 2021

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RHI Agency Team

Preventing the unexpected is not always in our power, but sometimes we can plan ahead and seek some protection, financially at least. One of the most vital and popular financial safeguarding tools available today is insurance policies. While shopping for policies, it gets pretty much overwhelming with all the choices out there. So many policy options leave us in a lurch, and many financial experts will add to the chaos by having you believe that you will need all of them. So, it might be a little tough to choose the policies that will suit you and your family the best.

If you want to purchase the right type and the right amount of insurance, you will have to go by your specific situation. This is where you will have to believe that there is no one-for-all insurance solution out there, and you will need to have a tailored mix that will suit you the best. Several factors, including age, children, lifestyle, employment benefits, can play a role while you build your insurance portfolio. If we skim the cream, most financial experts believe that you need at least four primary wheels of the insurance policies to get the car moving. You will have to go for health insurance, auto insurance, life insurance, and long-term disability insurance.

Life Insurance

One of the primary benefits of a life insurance policy is its ability to cover the funeral expenses and provide for the loved ones that you leave behind. Life insurance is vital, particularly when you have a family that is financially dependent on you, and you pay the bills with your salary. Going by the numbers, experts believe that you need a life insurance policy that will cover ten times your annual income. But this is something that is not affordable to everyone. While calculating the amount of your life insurance coverage, you should consider all the factors. Do not just consider the funeral expenses only but also count in the daily living expenses. This includes your outstanding loans, mortgage payments, taxes, credit card debt, future college costs, and child care expenses. 

As per a study conducted in 2018, 1 in 3 families might not be able to cater to the daily expenses in the event of the breadwinner’s death. You have two basic types of life insurance policies- whole life insurance and term life insurance. In simple terms, the whole life insurance policy can be your insurance instrument as well as your income tool. As long as you keep paying the premiums, the policy will cover you until you die. Term life insurance will cover you for a determined period. There are considerable differences between the two policies, and you will need the advice of a financial expert to help you decide the best option for you. Factors that can help you choose the best will include your occupation, age, and the number of dependents.

Health Insurance

Considering the study published in the American Journal of Public Health in 2019, you and your family are just one serious illness away from bankruptcy. The study was based on 900 people who had filed for bankruptcy between the years 2013 and 2016. The primary reason was medical problems and issues stemming from the resulting bills, income loss due to the illness, or both. These numbers should be taken seriously and should incentivize people to review their need for health insurance and its coverage. With the steep increase in co-payments and deductibles, dropped coverages, health insurance policy has become more of a luxury, and not many people can afford one. But because the average cost of a one-day stay in hospital can put a hole in your pocket, even a minimal health policy is better than having none. 

One of the best and least expensive options to avail of the benefits of a health insurance policy is to participate in your employer’s insurance program. Small businesses are usually not in a position to offer you that option. So, if you are not enrolled in the employer’s health insurance program, you can also check with the trade associations or organizations for possible health insurance coverage. If none of this is available, you should buy a private health insurance plan. 

Auto Insurance

The number of car accidents per year is scary. In 2018, 160,597 casualties of all severities were reported in road accidents in the UK. The United States recorded a total of 6.9 million car accidents in the same year. The economic costs of these accidents are a whole other story, and the numbers are numbing. There are regulations in place that establish financial responsibilities in the event of a car accident. Proof of insurance is now mandatory and required by law in the majority of countries. If you do not have the coverage, you are liable to fines, and the amount can vary in different countries.

If you are driving without insurance and an accident occurs, you will have to shoulder a considerable financial burden. If you, a passenger, or the other driver gets injured, an insurance policy will cover the expenses and act as a guard if litigation arises out of the accident. Auto insurance can also help protect your vehicle against theft, acts of vandalism, and natural disasters, like floods or hurricanes. The cost, of course, will be determined by individual circumstances. To get the right insurance, you need to compare rate quotes and provided coverage. You can also check periodically; whether you qualify for low rates based on the driving record, age, and the area where you live. 

Long-Term Disability Coverage

Here is a type of insurance policy that most of us think we will never need, and yet statistics have a different story to tell. A considerable number of workers have become disabled and were unable to work before reaching the retirement age. Often, people with good insurance, a cozy nest egg, and an impressive life insurance policy ignore the preparation for the day when they might not be able to return to work for weeks, months, or in some cases, ever again. While health insurance policy can pay the medical bills, daily expenses can go for a toss. If your employer is not offering long-term or short-term disability insurance, you might have to consider purchasing one of your own. 

The cost of disability insurance depends upon lifestyle, health, and age. The average cost of the policy might range anywhere between 1-3% of annual salary and offer 50-60% payout of the income.

Bottom-line

Though most financial experts consider these four policies a must for families to thrive, the list is not limited to just these four. You can always prioritize your needs and get the insurance that benefits your family better. The options are many, so are the providers, and having policies that cover your needs is a must. Insurance is expensive but not having one can be far more costly.

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