Insurance: Your Protection against Risks

Women today are grossly unaware about insurance matters. Themoneytimes.com makes an attempt at educating women in the importance and basics of insurance, thus empowering them to choose the right insurance for themselves.

It is a woman’s constant endeavor to ensure the safety and security of her loved ones, and yet paradoxically, it is her own security which takes a backstage due to lack or insufficiency of insurance cover.

Did you know that about 18 percent of American women between 18 and 64 years of age are uninsured, approximately one-third have no life insurance at all, and nearly two-thirds, from double-income households, find their life insurance policy coverage to be insufficient? Let’s make an attempt at changing these figures by learning about the basics of insurance.

What is Insurance?

Insurance is an instrument that equips you to deal with the unexpected events of life. It does not prevent mishaps but makes you capable of handling one, if it does occur. Insurance enables you to shift the cost of a sudden and unpleasant turn of events, which would have otherwise led to a financial disaster, to an insurance carrier / provider.

Types of Insurance Coverage

The five basic insurance covers that you might require are:
• Life Insurance
• Health Insurance
• Disability Income Protection
• Automobile Insurance
• Homeowner's Insurance

Now let’s try understanding what these insurance policies entail and why they are all important.

1. Life insurance
How long can you ignore the uncertainty of your life? Whether or not your family depends on your earnings, your life is immensely valuable. Although you might not be able to make yourself eternally available to your family, you can ensure that they lead a financially fulfilling life after you are not around by securing a life insurance.

There is a plethora of life insurance policies to select from. Which one is ideal for you would depend upon the following factors:
• Age
• Dependents
• General health
• Current job status
• Other policies
• Retirement plans
• Net worth of your assets

2. Health Insurance
The sky high costs of healthcare today have made health insurance all the more indispensable. Although the jargons used can be highly confusing, that is not a reason sufficient enough to take a matter as important as health insurance lightly. It could be a wise decision to take help from professionals in the matter.

3. Disability Cover
Although largely ignored, a disability can be devastating for the entire family, both emotionally and financially. While we are able to instantly recognize the importance of life insurance, most of us fail to identify that the chances of our being disabled are far greater than that of dying prematurely. And if that happens, social security will not cover its cost.

4. Auto Insurance
If you have a car, it is imperative that you understand auto insurance. In fact, in most states, you cannot even get a registration issued in its absence. It is immaterial how safe you drive or how short a distance you cover, accidents do occur. And, to protect you against such accidents, it is prudent to get auto insurance.

5. Homeowners Insurance
Our homes happen to be one of our most prized possessions and biggest investments. So, losing it to any natural calamity such as a fire or tornado would obviously mean a lot. Homeowners insurance provides protection not just to your investment and you but the members of your family and your household possessions as well. Even theft is covered under this kind of insurance.

Another reason which makes homeowners insurance important is mortgage lenders. No mortgage company will lend you the enormous amount of loan needed to finance homes today, considering the risk involved. A homeowner’s insurance policy helps guarantee that investment too.

Will I need all of them?

In order to get an answer to this question, you can start by interrogating yourself about the probable losses you might face and the alternate ways in which you could cover the costs involved. The following set of questions can come to your aid:

• Who would support my family if I die?
• Will I have sufficient money to take care of the hospital bills if I fall ill?
• Would I be able to financially shore up myself and my family if I’m incapacitated by an injury or illness?
• If I’m in a car wreck, do I have enough money to pay for the car repairs?
• Are my assets sufficiently protected against undue claims made by a third party?
• In case of a natural disaster, do I have sufficient money to rebuild my home, furnishings, car, essentials and property?

If your answer to any of these questions is in negative, you definitely need insurance. Remember, you need to pay for every cover you purchase and since most answers will be ‘no’, try prioritizing. Identify those losses that would pinch you the most. They should be catered to first.

Choosing the Right One

Remember, there are a wide range of covers offered by insurance agencies under each of the five categories. In most cases, the premium charged would depend upon the kind of policy cover you choose. So, you would have to vigilantly choose the one that seems most appropriate for you or ask them to get one tailor made as per your requirements.

An appropriate combination of insurance covers is perhaps just what you require to lead a stress free life and enjoy its finer aspects.