Insurance that is worth the money
Filed under: Bargains, Budgets, Insurance
Insurance is a necessity of modern life. Face it, there is, as yet, no way to guarantee that nothing bad will ever happen to you or that you will live forever. Oftentimes, though, people forget that simple fact and discover all too late that they did not adequately protect themselves.The good news is that getting proper insurance coverage does not have to be expensive. Even the most pricey insurance is a pittance compared with the costs that could be incurred if you lack sufficient protection. Below are 10 types of policies that are worth the money:
Life insurance
This is especially important if people count on your salary to pay the bills, whether it's your spouse or your kids. "Many people put off getting life insurance," said Jeanne Heisler, a New Jersey agent. "It's very inexpensive, especially if you are young." Single people may not need the coverage if they have enough money to cover their funeral expenses and pay off their debts.
Homeowner's insurance
Banks require that people get this coverage before they agree to underwrite a mortgage, since it protects homeowners from damages caused on their property to other people. The key for homeowner's insurance is to make sure that there is enough to cover the replacement value of the home, according to the Insurance Information Institute. Personal items such as furniture, sports equipment or clothes are also protected under these policies from "insured disasters" such as a fire or hurricane.
Health insurance
Though millions of Americans do not have access to affordable health care, some people choose to go without it even though they can afford it. "It's surprising, the number of people," says San Francisco agent Scott Hauge, who calls such people "immortals -- the people who are under 30 years old and think they are going to live forever." Keep in mind that you get a better deal on health care services if you are insured. Health insurers get breaks from providers on everything from doctor visits to prescription drugs because of their purchasing power.
Auto insurance
Going without auto insurance is a risk not worth taking. Not only are there fines and penalties, but the costs involved in an accident where a motorist is found to be even partially at fault are substantial. The Insurance Information Institute recommends that drivers make sure that they have uninsured motorist coverage, which is not mandatory in all states.
Personal umbrella policies
This is relatively inexpensive insurance that protects people against additional risks not covered by their auto or homeowner's policies. New Orleans agent Don Beery calls it "sleep insurance," meaning people should get as much umbrella coverage as they need to sleep at night.
Flood insurance
As many residents of the Gulf Coast learned after Hurricane Katrina, homeowner's insurance doesn't cover floods. "They don't think they need it because they aren't sitting near a river or an ocean," says Heisler. But "chances of having damage from flood and rising water are greater than a fire," he asserts.
Disability insurance
Though this often is provided as a benefit by large companies, many people do not have coverage that protects them in the case of a serious accident or injury. "There is a greater chance that you will have some sort of disability during your working years than dying," Heisler said.
Long-term care
You also might want to consider coverage to pay for nursing home or at-home care once you reach middle age. "As you get older, it becomes more expensive," Beery says. Remember that Medicare doesn't pay for what is called custodial care and private insurance may only pay a very limited amount.
Jewelry and art
People with valuable art, jewelry and other collectibles need to get a rider to their homeowner's policies. Otherwise, their valuables won't be protected if they are damaged by fire or stolen. "Some people never get around to scheduling their jewelry or fine arts," says Rebecca Woan, principal of Chartwell Insurance Services of Chicago.
Renters
People who rent their homes shouldn't assume that their landlord's policy will cover them in the event of a fire or other disaster covered by insurance. Moreover, like homeowners, renters are also potentially liable for any injuries guests may incur while visiting their homes. "Compared to the amount of property you could stand to lose in the event of a severe loss at your residence, renter's insurance is cheap," according to Geico.
Pets
As dogs, cats and other pets live longer, they are starting to get many of the same ailments that affect humans, such as diabetes and heart disease, which can be expensive to treat. A variety of coverage is available that's similar to health insurance for humans. "The cost of coverage is based on the animal's age, health profile and the level of care the owner chooses to buy," according to the Insurance Information Institute. "Generally, the older the animal the higher the annual premium will be."
Purchasing the right amount of insurance for your situation can be a complex equation, so be sure to consult an adviser or agent if you have any questions. Insurance is the one product that people buy and hope to never use. But with some types of coverage, it is far better to be safe than sorry.
Money Clips
- HILARIOUS: Warren Buffet Plays Axl Rose in New Commercial - Huffington Post
- ON THE PLUS SIDE: Where Home Prices Are Rising - CNNMoney
- FRICTION: Could China Trade War Put Walmart Out of Business? - 24/7 Wall St.
- PROFILE: Opinionated Auto Industry Insider Dies - FORTUNE
- DON'T LAUGH: More Homeowners Turning to Fake Grass - SmartMoney
- HIT HARDEST: States Hurt Most From Rising Gas Prices - CNBC
- GET YOUR MONEY'S WORTH: Best Cars to Buy Used - CBS MoneyWatch
Reader Comments (Page 1 of 2)
4-08-2008 @ 10:40AM
Michael Noonan said...
Fortunately or unfortunately I am an unemployed licensed insurance professional. A couple of things I might add to this acticle are about both the Homeowners and the Personl Liablility. On the Homeowner Insurance, one very important thing I would suggest to everyone, including Renters and those who own Condominiums, is do a Physical Inventory of you Personal Belongings, Take Photo's of Each Room, and keep these photo's at your office, at your parent's home in a safe deposit box, anywhere but home. Why, the answer is really quite simple; Fire, Flood, any Loss you may have happen which destroys your home. Who is the insurance going to believe? You after a questionable loss, or photo's of each and every room in the house with documentation that was done less than two years ago?
The Personal Liability Umbrella Policy is an excellent idea, however, you never want to over insure yourself either. If your actual networth is $1 million, then you do not need a $3 million Umbrella Policy, because the insurance company will only pay for ACTUAL LOSS SUSTAINED! There is no need to be OVER INSURED.
Thanks for listening or in this case reading.
Reply
4-10-2008 @ 10:19AM
Jeff C said...
Mr. Noonan,
I appreciate your comments. While you can not be reimbursed for more than you are worth, what would happen if we are sued by another party? For example, say we are involved in a car accident and fault is hard to measure. Someone in either car is hurt or dies. The costs go potentially far beyond our auto insurance coverage. How would we be protected? How much protection should we have? In another instance, some one is badly hurt in your home . . . .
Jeff C
4-08-2008 @ 1:45PM
DW said...
As current Insurance Agent in the State of Texas, I would like to add some comments. The Rating of the company you purchace from is one of the most important factors. In many states there is a write your own policy which means that each comapny may have different wording and coverages in the policy. It is very hard for the consumer to compare policies these days. I believe the problems created here is the result of the state governments that, "In my personal openion", have let the big three carriers run over the consumers liken to the banks and credit card companies are doing now as well, in my personal openion. It is most important to get to know your agent and have him explain your policy to you. Buying polcies over the internet and direct from carriers without going through an agent could be a costly mistake. How can as the saying goes "you get what you pay for", when you don't know what you are payning for? It is almost impossible for an agent to know the policy coverages written by all isurance companies. If you have a current policy, take it to your agent to compare it to another policy of another carrier when comapring rates and coverages. Do not buy a policy until you are satisfied that the coverages have been explained to you in detail. You might make any request for changes to your policy in writing and keep evidense of delivery to your agent and carrier. Return receipt mail and email followed up with a personal phone call is justified. Remember that your signiture is required on all documents encluding changes to your policy. This is for your protection in the event of a disagreement in your policy and agreements. Read your policy carefully. If you are changing policies, know what coverages changes you are making. When moving from one state to another, remember each state has it's own insurance laws and regulations and policy coverages will vary accordingly. I will respond to questions sent to Insureyou@aol.com
4-08-2008 @ 1:58PM
Harold Maloney said...
Mr. Noonan, if you are Catholic and in good standing with the Church, we have a position open for you here in Illinois! Email me and I will give you more info.
4-08-2008 @ 10:43AM
mlwnaw said...
Why is it that the state of Maryland doesn't allow the folks that live her to purchase "Long Term Care" insurance ? We are being discriminated against !!!
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4-08-2008 @ 12:52PM
Michael Noonan said...
Every State has different insurance laws. You would need to speak with someone in Maryland as to why...I really cannot answer that one, sorry.
4-08-2008 @ 11:10AM
Dave said...
I am an Independent New Jersey Resident Insurance producer. I am licensed in 20 states. You can get Long Term Care Insurance in Maryland. If you need it email me.
4-09-2008 @ 4:46AM
Deborah Dunn said...
I am 48 years old justwent thru divorce in 2004, I have no health insurance.. Can you recommend one?
I especially need dental insurance..
thank you
Deborah
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4-10-2008 @ 10:42AM
Michael Noonan said...
Deborah,
Dental insurance is extremely expensive, and really does not pay for a whole lot, if you can avoid having it, don't get it. You are better off getting a company with a Health Saving Account (HSA). Health Savings Accounts (HSAs).
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Mission
Health Savings Accounts (HSAs) were created by the Medicare bill signed by President Bush on December 8, 2003 and are designed to help individuals save for future qualified medical and retiree health expenses on a tax-free basis.
I does not matter that you are not retirement age, many wealthy people (And not so wealthy people) set this accounts up to save for things such as braces, bridge work, dentures, and medical problems that they know will be coming down the line.
These are just a few suggestiona. I hope they help.
4-08-2008 @ 9:47AM
Michael Noonan said...
You can not bleed blood from a turnup, can you? Sure, you could have your wages garnished for life, but, no judge nor jury in the land, unless you are grossly negligent, and unless you are doing something ON PURPOSE, which is grounds for denial by the insurance company anyway, would grant excess of your net worth!
Think about it, why would you want to over insure yourself? Why pay for insurance that you do not need? Yes, tomorrow, you may win the lottery, maybe not. In a horific God forbid case where you or one of your kids has a bad car accident and you cause a chain reaction collison, you policy limits will only pay to the policy limits, that is it! If you get sued, and your Umbrella Limits are maxed out, they courts 9/10, like I said unless you are grossly negligent, and like I said, 9/10 obviously it depends on the judge and/or jury but, they are not going to take your house...now, if this is your 4 or 5th DUI and this is happening to you...again circumstances dictate other actions...
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4-10-2008 @ 12:44PM
Angie said...
Dear Driver,
I know that you’re a good person. And I know that you are having problems with getting car insurance at a reasonable price. Please let me lecture you for a few minutes in this letter.
Imagine that you are driving to work. You left late so you’re in a hurry. Then, you remember that you left something at home that you wanted to take with you. Then, you get held up by a train. Finally, you’re almost to work. In the residential neighborhood where you are driving, there is a home where the mother thinks her 4 year old is old enough to play outside alone. Just as your cell phone rings, the 4 year old boy runs into the street after his puppy. You hit him. An ambulance takes him to the hospital. After 2 days of surgery, the boy dies. Was it the child's fault? Well, 4 year olds are too young to know better. Is the mother at fault? Well, who is going to blame a woman who just lost her baby? Was it your fault? Of course. You try to be a good driver but, sometimes, you can’t do your best. How will your insurance take care of it? The medical expenses are over $37,000 because of how hard the doctors tried to save the boy. Your insurance policy has a bodily injury – per person limit of $25,000. Your insurance company writes a check to the family for $25,000 and says good-bye to you.
Six months after this accident, you are served with legal papers because you are being sued. The family of the little boy is suing you and your entire family for $5,000,000 and $1,000,000 for pain and suffering, and $1,000,000 for loss of future earnings. You hire an attorney that charges $250 - $400 per hour to defend you. He requires a $5,000 retainer before he even does a thing on your behalf. Where do you think all this money will come from? There is NO legal limit to what they can sue you for. You have to pay for the attorney to a lot of work hoping that the judge will send you home in the first hearing. In the meantime, the legal bills are piling up. How much will you owe before it’s over? What will you have to sell to pay that bill?
Thank you for taking a few minutes to think about this scenario. It happens more often than you would think. Take this letter and tape it to your dash board. Then, drive slowly. I don’t want to see your name in the paper, in the obituaries or in the police section. When your friends ask why you are going so slow, show them this letter and ask them to pitch in $100 per month for your car insurance. As soon as you can, increase your liability limits as high as you can and/or get an umbrella policy. Insurance companies know that most claims are small so, if you multiply your liability limit by 5, you premium will only go up a few dollars, honestly. Where I live, a $1,000,000 umbrella policy costs $100-$250 per year. Come on! That's too expensive? Really?
Be careful,
4-08-2008 @ 12:01PM
Harold Maloney said...
I am a licensed and employed insurance producer in Illinois. Let me help set the record straight about the difference between whole life insurance and term insurance. First, whole life. It is not only protection to your family after your death, but it earns cash values and more death benefits every day. By making premium payments, you earn dividends. The dividends increase your cash in the policy and builds a larger death benefit as it grows at the same time. Pure whole life is a cash accumulator. You can borrow most of the cash in the policy at any time for emergencies. It is a policy loan, but you can elect to pay it back or just pay the interest due annually. This keeps the loan from increasing by paying it down each year. Another advantage to whole life occurs within the first 15 years of ownership by accumulating enough dividends and paid up additions (additional death benefit), to pay for itself, if you elect to do so. It still has growth, but not as quickly as continuing premium payments. You can also start and stop payments after this maturity occurs. One final advantage is the retirement aspect of a whole life policy. At any age, especially ages 60, 65, or 70, you may elect to turn your cash build-up into an annuity which will pay you a monthly income for as long as you live. You will have to surrender the death benefit, but it gives you another source of retirment money.Whole life becomes pricey with your age and health condition. The older you are, the higher the premiums.
Term insurance is what it is - temporary insurance. It does not accumulate dividends or cash values. It is just like paying rent, only you are renting your hard earned money. Sure it costs less, but it does not have the extended value as does a whole life policy.
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4-08-2008 @ 11:02AM
Sara West said...
What was said about Health insurance below...and I quote " Keep in mind that you get a better deal on health care services if you are insured. Health insurers get breaks from providers on everything from doctor visits to prescription drugs because of their purchasing power"...(this must have been written by someone who sells insurance)......that statement IS NOT TRUE....IF YOU ARE NOT INSURED YOU GET DISCOUNTS. I had BLUE CROSS with a $5000 deductible, I needed a cat scan, as an insured person I was quoated $3500 for the cat scan but they WOULD NOT allow me the cat scan BECAUSE I HAD NOT met my deductible, so I went elsewhere as an UN-insured and they quoated me $750 which I was able to write a check for....that is a SAVINGS of $2750 which would have had to come out of my personal pocket that I SAVED BY SAYING I WAS NOT INSURED. I am insured in case of a catrastophy, but unless I have met my deductible, as you can see, UN-insured, especially if you go to a MEXICAN clinic like I did and I am caucasion, was born in America, and an American citizen, one gets a better deal by saying they are NOT insured. UN-insured get better deals, insurance companies ARE businesses, what business does not want to make a profit, Blue Cross was making a major profit off me, I changed insurance and found a less expensive one but as long as I can get discounts by going to mexican clinics and saying I am uninsured I will pay the cheaper doctor bills by doing so.
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4-17-2008 @ 9:16PM
Robert Simmons said...
Sara I echo your expierence I went to my local Hospital in Hudson WI they quited me the discount through my ins. co, I told them I wanted to pay cash they would not chane the price. I went to a healthcare facility in Stillwater MN and told them I was uninsured and pating cash the same procedure was 40% less.
The healthcare system is a disaster!!
4-08-2008 @ 11:13AM
cmanley said...
Life Insurance, definitely should have, home insurance, definitely should have, auto insurance mandated in most states...
Most people trim these down to what they can afford. Term life is better than no life insurance.
Health insurance should be a government based program for basic healthcare for everyone and then the insurers can add on what they want giving affordable choices to people.
All the others are nice if you can afford them.
I'm from Florida so I have seen first hand what the insurers really want to insure....low, conservative risk with no regard for people who will use the system. To make insurance work you have to have both. Life Insurance works because it is a long term investment vehicle for the insurers...casualty insurance is another story. People in Florida complain less about their auto insurance than their home insurance....fact is people here pay more in insurance for their $10,000 car than their $200,000 house but they will complain most about the home insurance.
So was this article paid in part by the insurance industry? Wishing someone would write something with substance instead of you should buy it all....
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4-08-2008 @ 11:52AM
jeanie said...
I liked what you said about whole life insurance being more for protection not for investment. I was talked into bying whole life insurance that is used like a mutal funds in my early twenties...now I don't know how to get out of it. Eeverytime I call the agent to cancel it, he says that I would lose almost everything that I've already invested in teh last 9 years. Could you recommend something I could do?
4-08-2008 @ 11:19AM
Charlie said...
Whole life insurance is a poor "investment" with a very minimal return on the cash you have in the policy. You're better off buying Term Insurance for a much lesser premium and investing the balance in Mutual Funds or Stocks. Life insurance is for "protection" not an investment. Don't be confused. Agents prefer to sell you Whole Life policies since their commission is much higher than if you bought a Term policy. It's your duty to spend that "commission" on pure protection for your family and make an investment with a higher return for them also.
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4-08-2008 @ 11:56AM
jeanie said...
charlie,
my comment above your posting is meant for you. Could comment on how I should get out of the whole life insurance investment deal that I'm in?
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4-08-2008 @ 2:03PM
Harold Maloney said...
Jeanie - you mentioned that you wanted to get out of your whole life insurance policy. Is this a universal life or a variable life policy? This will help determine if you can cash it in or not. Harold.
4-08-2008 @ 12:15PM
Earl said...
There is one area that you stated is an insurance that you do not need. That is Identity Theft. I have researched the companies that offer Identity theft insurance. The vast majority only are willing to offer a person help with financial identity theft. There are other areas of identity theft, Medical, DMV, Social Security and Criminal. I wouls suggest that you doe some checking for a company that not only monitors but restores these areas. That would be worth it.
I not only liked the services, I became an associate to be able to offer these services to others.
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