Protecting your most important assets with comprehensive insurance is a no-brainer. Accidents and disasters can and do happen, and if you aren’t adequately insured, it could leave you in financial ruin. Taking steps to safeguard your earning power and possessions from unexpected and unforeseen events is, therefore, a must. But with the wide variety of insurance policies available on the market, it can be difficult to work out which are the critical ones to have. Here we identify the five most important insurance policies that everyone should have.
Making sure that our loved ones do not face financial hardship in the event of our deaths has to be a high priority for everyone. Before deciding on a policy, think about how much you earn each year and the number of years you have in the workforce, and go for a policy that will cover that income if you were to die. It’s also a good idea to include funeral costs as often this is an overlooked and expensive financial burden for loved ones at what is a very difficult time.
Long-term disability insurance
Sticking your head in the sand and saying ‘it won’t happen to me’ is a foolhardy approach to what admittedly may be a remote possibility, but nevertheless is still a possibility. Instead, choose a disability policy that provides enough coverage to enable you to maintain your current lifestyle even if you are no longer able to work.
Some people see health insurance as being an optional extra, but the potential cost of not having adequate health insurance can be enormous. Even a simple visit to the GP can result in a hefty bill so imagine the many thousands that would result from surgery or a lengthy stay in hospital. That’s why it’s a must-have insurance policy.
The cost of replacing or rebuilding your home as a result of some catastrophic event could be financially ruinous, and so it’s a good idea to have insurance in place that will cover you. When choosing a policy make sure that it covers the replacement of the house and all the contents plus the cost of living elsewhere while your home is being repaired.
Car insurance is not always compulsory; however, it’s a good idea to at least have third party insurance so that if you do cause an accident, you are covered for any damage to other cars. Sadly accidents do happen and if you are at fault, you can find yourself facing hefty repair bills not only for your own vehicle, but also for any others involved. So even if your car is an old banger, make sure that you have adequate third party insurance as a minimum.
The world of insurance is highly competitive and each policy will have its own benefits, coverage and prices. It pays to shop around, but before signing up make sure that you read the small print and fully understand what’s covered and what’s not.