Posts Tagged ‘insurance plan’

One Big Insurance Myth and Its Reality

Tuesday, March 30th, 2010

Many people today see insurance as a waste of money because they do not think they need it. Those who have it are often in the same boat but feel cheated because they’re paying for something they may not be using. However, insurance is not there for you to benefit from each and every day and based solely on the money you have paid. Insurance is that extra peace of mind; the comfortable feeling of knowing you are prepared for and protected in the event of life’s inevitable what-ifs.

A lot of people also believe everything they hear instead of finding out on their own. They listen to the media, their friends and family, advertising propaganda and even the pitch of an insurance salesman trying to make an extra buck. The insurance sales man and the other forms of influence are not wrong in what they do. They have their own opinions and some do have a job to do. However, the decision of what insurance plan to buy lies squarely on the shoulders of the consumer, who should research the information, read the fine print and decide for themselves, minus the influence of other sources. Those other sources are not you, do not live and walk in your shoes and do not know your needs. Only you can know those things and make the decision for yourself.

With that in mind, there are many myths floating around out there about insurance. These can be costly mistakes for the uniformed consumer. Here is one big myth and the truth behind it to help you make a better decision when it comes to purchasing your insurance plan. Whatever the insurance type, this myth and reality will apply.

Myth #1: Bare Minimum Coverage is Cheaper, so it’s Better.

Not exactly. Saving money is great, however, bare minimum coverage may leave you hanging in an unfortunate event, and you will be left to at the costs of whatever your insurance will not cover. This doesn’t mean you need to buy the maximum coverage or coverage for things you certainly won’t be facing. After all, one would not buy hurricane insurance while living in the Midwest. However, you do want to plan for life’s little (and big) what-ifs, so you need to take that into consideration and purchase a plan that covers at least the majority of what you may someday need. Even if you do not use it, it is not a waste of money when compared to what you could wind up paying out of your own pocket without coverage.

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Dissecting the Deductible

Friday, March 26th, 2010

While many people may have some form of insurance, they do not always understand exactly what it really means to have a deductible. The fine print is not always clear enough, even if it states the terms in black and white. The layperson does not always read and understand legalese the way the insurance company and a lawyer might. This is especially true for those shopping for insurance and the newly insured.

Deductibles Defined

For the most part, almost any insurance plan will involve a deductible. There are of course a few exceptions, one being life insurance, however, if your insurance plan mentions a deductible, there are a few things you will need to know.

The deductible is the amount that you will have to pay out of pocket before your insurance will take over the costs. Say you have a deductible of $1000 on your car insurance. You will have to pay this much yourself before your insurance will kick in or in the event of an accident before you have fulfilled your deductible requirements, the insurance will pay you the amount of your claim minus the deductible. The exception is a claim that is less than your deductible. if your deductible has not been paid and the claim is less, the insurance company will cover nothing.

Deductible amounts will vary from insurance plan to insurance plan, but are typically in balance with the premiums being paid. If you want a plan with low to no deductible, you will have to pay a higher premium. If you want a lower premium, your deductible will be higher. You really want to pick an insurance plan that has a balance between the two that will make your policy affordable and offer reasonable coverage after the deductible has been met.

What is the Purpose?

The reasoning boils down to three things, really. For one, this is a way to encourage people to take more responsibility for themselves and what is theirs. Secondly, deductibles can reduce your premiums somewhat (and hey, any amount of savings matter these days, right?) because the insurance company will have less to pay out on claims. Finally, deductibles are also about human morality; right and wrong. having a deductible teaches responsibility, as mentioned before, reduces carelessness, and lessens the number of petty claims being made and paid out.

Now that you have a better understanding of deductibles, compare premiums and deductibles to be sure you are getting a good deal, whatever the insurance plan, and remember to pay those premiums and meet your out-of-pocket responsibility so you are guaranteed the full coverage of your plan.

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Basics for Beginners: What You Need to Know About Insurance

Friday, July 17th, 2009

While navigating the different types, benefits, and costs of insurance programs may feel intimidating, you can easily determine which insurance programs to choose based on your own needs and interests.

The Basics of Insurance

Insurance is essentially a type of “investment” that protects you from unforeseen accidents or misfortunes. By choosing an insurance plan for your automobile, home, life, or other focus, you are allowing an insurance company to provide you with financial protection amidst life’s daily risks and potential dangers. As there are a variety of insurance categories, the most popular insurance interests include:

Automotive Insurance - Auto insurance is typically required for all drivers. Although each state has its own insurance regulations, automotive insurance protects all drivers on the road. Essentially, if you are in an auto accident and are the “at fault” driver, then your insurance should typically cover both your car’s damage as well as the other victims’ damage. Similarly, if you are hit by another driver, the offending driver’s insurance should ideally cover your damages as well. When choosing auto insurance, individuals should meet with an insurance agent to determine how much they would like to pay each month / year, the size of one’s deductible, while making additional personalized decisions.

Home Insurance - Home insurance, similar to auto insurance, essentially protects your home from unanticipated disasters or damages. Many home insurance policies are customized to the specific dangers that one’s local area may present; for example, homes residing in tornado-prone areas will benefit from policies that specifically address tornado-related damages. Also, for those who are not home owners, individuals can also invest in renter’s insurance, which protects their belongings in the case of damage and / or theft while residing in a rented property.

Life Insurance - Once an individual begins his or her career pathway and / or begins a family, one typically establishes a life insurance policy. Life insurance allows individuals to provide a designated sum of money for their spouse and / or children in the case of accidental or unexpected death. This allows family members to ensure that their basic needs can be met in the unfortunate case of a main provider’s demise.

Travel, Pet, and Additional Forms of Insurance - Adding to the most common categories of insurance, some individuals also choose to enroll in supplemental insurance investments, including pet insurance and travel insurance.

Although there are a large variety of insurance programs for your consideration, in the world we live in, many will attest that the term “over insured” has become outdated.

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