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The type and amount of insurance you need or want depends on your lifestyle, your goals, your debts and your source of income. The important type of insurance that everyone should have coverage on is auto insurance, home insurance, life insurance and health insurance.
Auto Insurance Basics
Auto insurance is required by law in most states. Most states will at minimum require liability insurance. This insurance protects the insured person when they are the one at fault in a car accident that may have hurt a third party person. In most cases, collision and comprehension insurance are added to automobile policies.
Collision and Comprehensive
When you are involved in an automobile accident, collision coverage will pay for damages to your vehicle and any personal injury to you. The benefits for personal injury usually include health care costs after the accident and medical payments due to the car accident. Property damage is paid which will cover the cost of your vehicle repairs.
Comprehensive insurance pays for the damages to your vehicle that is not caused from a car accident. The types of things generally covered under comprehensive are natural disasters, vandalism, explosions, theft and fire damages.
Home Insurance Basics
Everyone needs protection for their home and their property. Home insurance provides that liability coverage. Many lenders will require a buyer to buy home insurance that will cover the cost to replace the damages to the property and the home that could occur. The lender is investing in your property and needs to be sure that the property is good collateral. Home insurance policies normally cover the contents of the home and the liability.
Liability insurance on your home will take care of any personal injury or damage caused to other people who may be on your property when something accidental happens. It's very important to have this type of insurance coverage in case someone files a civil suit against you in the case that someone is hurt or has died on your property.
The content insurance is going to cover the personal belongings and valuables you have inside the home should something happen through a natural disaster or theft.
A life insurance policy is something that everyone will need at some time in their life. Knowing which type of insurance policy is best for you is the real question. Life insurance is not mandatory, but optional.
Term life insurance is a life insurance policy that is short term or temporary. It only runs for a specific period of time which is generally not a long time. You pay a premium during the time the policy is valid to ensure that if you get ill or die, the policy is good and will pay out. You are not investing money in a term policy. Term life insurance is often taken out when someone has a mortgage loan.
Whole life insurance will run for a long term and does not end until the policy holder dies. The policy will pay a sum of money to the beneficiary upon the policy owner's death, and the policy will also have some type of cash value for a portion of the money that was paid in with the premiums. Whole life insurance policies are generally more expensive than term life insurance policies.
Health insurance is a type of insurance that will cover your medical expenses in times of illness or injury. Health insurance generally falls under one of two categories. One is a major plan, the other a basic plan.
The major plan has a wider range of medical services such as inpatient and outpatient benefits. This type of insurance generally covers in patient stays at the hospital, mental health service treatments, surgeries and emergency treatments. There is a high premium rate that the policyholder has to pay for this type of coverage.
The basic plan will cover more of the basic and general cost of medical care. This will also cover hospital stays, emergency treatments, lab tests, medications and mental services. However, there are monetary limits on these services, and if that amount is met, the patient will have to pay the balance of the cost.
It's always best to check around and compare insurance rates for all your personal and family needs.