Achieving Your Financial Goals - Protecting Yourself With Insurance

Investing in quality insurance is the first important step that an adult should take to start building their wealth and achieve their personal financial goals.  Why?  Because, having the right kind of insurance is like planning for a bad storm - you can't really foresee anything that's going to happen until it's too late to protect yourself.  Insurance is basically a fall back toward future fiscal risks, such as damages to property or person, or even the loss of the loved one.  It is extremely important to base your financial goals around a strong foundation of insurance, because it will protect you in the future from unforeseen and costly events which occur in life.

Many types of insurance are needed in this day and age.  Virtually anywhere in the United States requires that a vehicle operator insure their vehicle.  Many states require a home to be covered by homeowner's insurance.  The same can now also be said about health insurance since the new health care reform.  These types of coverage are essential and mandated, and therefore, since you have to pay for them anyway, there is no good reason in overspending on obligated coverage.  There are some simple steps you can follow to make sure you don't overpay.

• Always Get Several Quotes
  Insurance companies are always monitoring your activity, and if they believe you might stop using their service because you can get a better rate elsewhere, they may offer you an incentive.  Even if you are getting a good rate at the moment, it is a good idea to spend a few minutes and do some research.  Sometimes you can get a better quote from another provider.  The companies that offer you a better price usually offer to cancel your current insurance plan so that you can avoid the awkward situation.  The best plan of action, however, if you receive a cheaper rate from another provider, is to call your current insurance provider and tell them that you are going to cancel your coverage for a better rate.  Your insurance company won't want to lose your business, and they may offer you an even better deal than you could get elsewhere.  Many people save hundreds or even thousands of dollars a year just by spending 20 or 30 minutes every few months shopping around in this manner.

• Increase your Deductible to Lower Your Rate
  Your deductible is the amount of money you have to pay to cover the cost of repairs or hospital bills before your insurance covers the rest.  If you have enough money in your savings account, and enough self control to not touch those funds, raising your deductible might be a good way to lower your monthly expenses if you don't foresee any major claims in the immediate future.  This is an excellent way to save substantial amounts of money on your insurance premium, and the insurance agencies are usually more than happy to increase your deductible in exchange for the lower rate because they won't have to pay as much money in the future.  The key to remember is to try and make the immediate savings pay for themselves before a claim is filed.  For instance, if your monthly bill for auto insurance was $200, and by increasing your deductible from $500 to $1,000, you now only owe $150 a month, you want to go at least 10 months without an insurance claim so that you will have saved at least $500 on your insurance before you have to pay that amount back.  If you were to go even longer without a claim, then the deductible increase will have been more than worth the future costs in terms of savings.

• Ask for Discounts that are Applicable
  Most insurers offer discounts for one reason or another.  For instance, many auto insurance agencies offer good driver discounts, good student discounts, or even discounts based on the number of months you go without an accident.  It is always a good idea to ask for as many discounts as you can find are available to you (and you qualify for).  Sometimes, an insurance agency won't automatically give you an insurance discount, so do your research and ask for those discounts directly to lower your expenses.

Even if you don't own a car, or a house, or have any property that you believe is valuable enough to insure, the most important insurance that everyone should have is life insurance.  The first reason that everyone should have life insurance is because every life is valuable.  You value your life, don't you?  So do others.  When you pass away, your "final expenses" are exactly as they sound - expensive.  Life insurance is protection for your loved ones, especially if you are a main contributor to your family's income stream.  While having insurance protection in no way lessens the burden of losing a loved one, having enough coverage at least insures your family will not have to suffer an undue financial struggle because of an untimely and unexpected loss.  There are two main types of life insurance:  permanent life insurance and term life insurance.  The two are extremely different, and the following is a summation of the reasons you should only have term life insurance.

• Costs
  Term life insurance is much cheaper, in both the short and long term, than permanent life insurance is.

• Fees
  It is in the best interest of the insurance companies to sell you permanent life insurance because of the high amount of fees associated with it.  Term life insurance is not associated with such fees, and this is the second main reason why term life insurance should be your choice.

• Investments
  Permanent and term life insurance plans offer investment opportunities for the money you pay into coverage.  Insurance investments often seem comparable to regular investments, but typically offer poor returns and perform poorly.  Therefore, it is better to not invest your money through either insurance plan, and simply invest the savings on insurance yourself through a regular investment plan.  Furthermore, when you pass away, depending on your insurance plan, permanent life insurance coverage can withhold any of your savings you had invested with them since you are no longer paying your premium.  Many times, you are forced to try and foresee your own death and remove your savings before you die with permanent life insurance.  Then, when you remove your savings, your coverage is lessened by the same amount of money you have removed.  Sounds terrible, right?  The same cannot typically be said with term life insurance plans.

• Savings
  Term life insurance has no savings associated with coverage.  You pay for insurance on specific terms, such as 10 years or 30 years.  When you are done paying for insurance, you are covered until you die.

This is a difficult question to ask because it is hard to know how much final expenses will cost in the future.  Therefore, a typical plan of action is to pay for coverage that will far exceed the estimated final expenses.  Sometimes, a good idea is to buy insurance coverage that will pay for at least 2 years of your family's expenses.  It might even be a good idea to cover yourself for the amount of your children's education expenses in the event your savings are capped when you die.   How much coverage you pay for is up to you, and fortunately there is help on the internet to determine the amount of coverage you should get.  Just run a google search for "life insurance calculator" and you should find some helpful tools.

Now you know the most important aspects of paying for insurance coverage.  Be sure to shop around for competitive quotes, cover yourself for the right amount, and above all, choose coverage plans that are right for you, your budget, and your lifestyle.  Paying for insurance is the first step in being financially stable, and this guide should have pointed out some key aspects that you may not have already known when it comes to the importance of having insurance.  If I missed something, or you would like to know more, just ask me a question or join my fan club to write me some fan mail and I will be more than happy to write another hub to cover anything important I may have missed.