While I cannot promise that navigating the insurance world will be easy, following these tips can go a long way in ensuring you the best value for money and the best protection for your insurance money.
| Guest columnist
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- Jeff Zander has more than 40 years of experience in the insurance industry and specializes in all areas of HR, business and employee benefit programs.
Buying insurance can feel overwhelming. Unfortunately, many insurance companies are trying to sell you a range of products that are frankly a waste of money.
I’ve put together a checklist of five core insurance programs that I recommend in conjunction with an emergency fund.
These programs can help ensure everyone and their families are adequately protected without wasting money:
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automobile
Liability coverage is the most important consideration when choosing a car insurance policy. Liability insurance covers the cost of property damage or personal injury for which you are responsible in the event of an accident. This is your greatest risk in operating a vehicle, and increasing this protection is usually very cost effective.
In addition, you should always consider a deductible that your savings or emergency fund allows, as this will help lower your rates. Lower deductibles usually result in more frequent minor claims which insurance companies either use to cancel or to increase your rates.
If you have an older car, also check its Actual Present Value, ACV, to see what you would pay if it were added up and compare that to the cost of insuring that amount. It may be a better decision to skip comprehensive and collision all together and save those dollars in some cases.
Homeowner
In addition to your income, your home is usually your greatest asset. Home insurance is essential to protect your home from natural disasters, theft, and other unexpected damage.
Remember to include extended or guaranteed replacement costs as this will provide the funds necessary to rebuild your home if the policy is insufficiently value to cover all of these costs. Also consider flood and earthquake insurance, as these are often excluded from traditional home insurance.
As with car insurance, always take into account the higher liability coverage of your household insurance.
With more people working from home and having pets since COVID-19, we’ve seen more visitor injuries and a 40 percent increase in dog bite-related claims.
Also, always compare the home and car combination with the same company as most offer discounts, which is an easy way to save.
health
Although health insurance can be expensive, you don’t want to expose yourself to the financial consequences of unexpected medical problems. Medical advancement now comes at a high price, and the lack of health insurance can wipe out not only a family’s current savings, but also their future income. Determine the highest deductible you can afford based on your ongoing medical needs and your emergency fund.
Health Savings Accounts (HSAs) can also be very helpful as they allow you to lower your costs through higher deductibles while using the savings in a tax-free account for future expenses.
Life
Term life insurance is the only life insurance I recommend as it is the most affordable way of protecting your family. Never “invest” in cash value life insurance. Instead, start with a term contract based on 10 to 12 times your income on a 15, 20 or 30 year plan (depending on your age and financial situation). Remember, as you reduce debt and increase your savings, this amount can be reduced and eventually eliminated.
Even with limited life plans, stay away from policies that include many additional drivers such as premium repayment, serious illness or other vital benefits. They are a waste of money and unnecessary when you have the other core insurance plans.
Long-term disability
The last core insurance product to consider is long-term disability insurance. Your greatest asset is your income, and this type of protection is the most thorough and cost-effective way to cover yourself in the event that you lose your ability to work.
In most cases, a plan offered by your employer is the best option as it is usually the most cost-effective option and eligibility to work is guaranteed. If a group plan is not offered or you prefer an individual policy, look for a plan with at least five years of benefit as most disabilities will be resolved within five years.
However, if it fits into your budget, a benefit period up to the age of 65 would be ideal. A disability plan has many elements so make sure you discuss all of your options with a qualified agent.
While I cannot promise that navigating the insurance world will be easy, following these tips can go a long way in ensuring you the best value for money and the best protection for your insurance money.
Remember, it is most beneficial to contact an independent agent who represents many companies as they will shop for you to find the best options, which will save you time and money. To learn more, visit www.zander.com.
Jeff Zander has more than 40 years of experience in the insurance industry and specializes in all areas of HR, business and employee benefit programs. Nashville-based Zander Insurance Group was founded almost 100 years ago by his great-grandfather, Herman Zander, and Jeff is the fourth generation CEO of this family and employee company.
source https://collegeeducationnewsllc.com/checking-your-insurance-checklist-so-every-aspect-of-your-life-is-covered/
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