The Best Approach to Insurance

credit: Katayun

Insurance salespeople will assure you that a dozen different kinds of insurance are necessary to feel secure in life. But often these very insurance policies are what’s holding you back financially, insuring you for low-risk “what if” scenarios, and very often not even actually covering what you think they are. Try these tips to figure out exactly what insurances are important in your life:

• Have health insurance. Getting ill or having an accident is a common occurrence in life, and you don’t want to be faced with huge debts caused by hospital bills. Your health is something you can’t play with; it’s not like a car that you can decide you don’t need anymore.
• Be cautious about life insurance. Single people with no dependents and no major debts like a mortgage usually don’t need life insurance – and the premiums can be alarmingly high. If you’ve got a home loan and children, try to arrange some life insurance, but do it carefully, and don’t be talked into more than you need by an overzealous agent. Sit down over a week or so and consider exactly how things could pan out for your family if you weren’t there or couldn’t work.
• Save money by having high deductibles on your premiums. These are often worthwhile. Consider the risk of an event occurring – an automobile accident, or a long stay in hospital – and if it’s something that seldom occurs, a high deductible is probably worthwhile. You might have to pay a higher excess at the time of an incident, but the savings you’ll make over the life of the policy are larger.
• Consider combining insurances. Look into whether your automobile and homeowners insurance can be provided by the same company. They’ll often provide you a discount.

Tags: Budgeting | finance | Insurance | Saving Money | savings