If you have a car, you most likely know you need car insurance—and legally it’s required in almost every state—but you might not know how much coverage you really need. From teen drivers to commercial vehicle operators, find out which policy is right for you. Plus, learn how to protect yourself from insurance scams, prevent DUIs, and more.
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Homeowners insurance not only protects the structure of your home, it can also protect your property and possessions, and include liability insurance for accidents that happen on your property. Every home has its own needs. Find out more about what kind of home insurance coverage is right for you.
A life insurance policy can ensure financial protection for your family in the event of your death. But at different stages of your life, your policy and coverage needs will likely change. Find out more.
Health insurance is complicated. And while the Affordable Care Act (ACA) made it easier for many who previously couldn’t get health insurance to get coverage, it’s often hard to unravel what kind and how much insurance you need. Let us help you finally understand the difference between an HMP and PPO, avoid common scams and more.
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Most people know they likely need car, home, life or health insurance, but they might not know that there are many other kinds of coverage that can protect you while you travel, help you pay for pet expenses and more. Find out about other types of insurance you might need.
What Kind of Coverage Do You Need Now?
Wonder what kind of insurance you’ll need at different stages of your life? Here are four profiles ranging from a college student to a senior, with expert Ira Townsley’s take on what each is doing right (or wrong) and how they can improve their insurance coverage.
Ira Townsley is a pen name for a licensed P&C and Life producer with one of the nation’s leading insurance carriers. He serves annually as a volunteer for the nonprofit organization, Life Happens, as an application screener for the Life Lessons scholarship program. He is also a veteran journalist and author, and in addition to covering insurance topics, writes regularly on the subjects of sales, tourism and pop culture.
Briana is a college student who rents an apartment off campus, for which she’s purchased renter’s insurance. She has a student health insurance policy (SHIP) through her university. She’s covered through her parents’ car insurance plan, and they qualify for a student distance discount on their policy while she’s away at school. She doesn’t currently have life insurance.
Briana is smart to have protection in place to cover her personal property at her apartment. While she probably doesn’t have a lot of stuff there, it’s nice to know that if her stereo, speakers and computer were stolen or if one of the neighbors started a fire that destroyed the building, she’d be covered. It’s also a wise move to stay on the family’s auto insurance, as this will establish a record of continuous coverage. In addition to a discount for being a student away at school, she should be eligible for further savings if she keeps her grades up.
It’s good that Briana has some health insurance through SHIP, but she may not know of some potential issues that can arise with this type of coverage. MoneyGeek’s Student Health Insurance guide can help her determine if it’s the right amount of coverage for her needs.
As a college student, Briana is at a good age to get a whole life insurance policy. As time goes by and people get older, policy premiums will only get higher, but by locking in a policy at this point, she can keep the rate down and will have the policy, even if she were to develop health or medical issues later in life. And with a whole life policy that builds cash value, she could borrow against it if necessary when she’s older and needs something such as a down-payment for a home purchase.
The Single 30-Year-Old
Alex is a single, 30-year-old freelance writer. He purchased private health insurance through the HealthCare.Gov Health Insurance Marketplace. He takes public transportation and doesn’t have a car, so he doesn’t currently have car insurance. He rents an apartment—for which he has renter’s insurance—where he lives with his greyhound Sadie, who’s covered by pet insurance. For an upcoming trip to South America, he purchased travel insurance. He doesn’t currently have life insurance.
Alex’s renter’s insurance is a good choice, not only to provide coverage for his personal property, but also because he owns a pet. Even the most well-behaved dogs can lose their temper at times, and the average dog-bite insurance claim sits at about $35,000. His renter’s insurance will provide liability coverage should Sadie bite someone. It also provides liability coverage if she doesn’t bite someone, but still causes damage or injury, such as if someone were to trip over her and break their arm while Alex is walking her in the park. He’s also thinking ahead by having pet insurance, since medical issues for our furry friends can pile up quickly.
It was also a smart decision for Alex to purchase health insurance. By having coverage, he’ll avoid costly medical bills in the future if he does fall ill or have an accident. He’ll also avoid paying the penalty fee ( $695 or 2.5% of household income above the tax return filing threshold per year as of 2016) for not having minimum essential coverage under ObamaCare.
He continues his forward-thinking by getting a travel insurance policy, but drops the ball on life insurance. Just because he’s footloose and fancy free at this point in his life, he may meet someone and have a family at some point in the future. And even if he stays single, he will still pass away one day, and funeral costs, usually estimated at about $15,000, will have to be borne by someone. With a small final expense policy in place, he can ensure that his death will not be financially devastating to any loved ones, even if that particular group is limited only to Sadie.
Jon and Sylvia live in California with their two children. Jon is a college professor and Sylvia is a stay-at-home mom. They have a home insurance policy to cover their home, along with additional earthquake insurance. They also have car insurance to cover their minivan. The entire family is covered by health insurance through Jon’s employer. Jon also purchased a $1 million 30-year term life insurance policy to protect his family financially if something happens to him.
Jon and Sylvia seem to have their bases covered. With home and auto insurance in place, they should be able to relax and just conduct an annual policy analysis to be sure that the coverages remain adequate. They’ll want to be sure that the replacement cost coverage keeps pace with inflation and the true costs of labor and materials in their California market. And Sylvia might not be playing chauffeur to their children and their group of friends yet, but in a few years, she may want to increase the Medical Payments coverage on the auto insurance. Since the family has some nice assets in their home and auto, they may want to consider an Umbrella policy for some added liability protection.
Jon’s life insurance policy is a good hedge against the future, because at 30 years of coverage, it should provide some help for Sylvia to pay a mortgage or provide for their children’s future, should something happen to Jon. But the family may want to consider a policy for Sylvia as well. While there isn’t a specific income-replacement aspect in this situation if Sylvia were to pass away, there would still be a number of additional costs to be covered, such as her final expenses, child care for their children, and paying to provide for the host of other chores, tasks and activities that were previously handled by the stay-at-home spouse.
Joe is a retired senior who lives in an assisted living apartment. He has renter’s insurance for his belongings. He doesn’t currently drive, so he doesn’t have car insurance. He has Medicare and purchased a Medicare Supplement Insurance (Medigap) policy to ensure all of his medical needs are covered. After his term life insurance policy expired, he didn’t purchase a new life insurance policy.
Joe’s personal belongings will be protected by his renter’s insurance, and in the off chance that someone visiting him in his apartment is injured, the policy will provide coverage for that as well. And without a car, he has no need for any auto insurance. His additional Medigap policy will cover medical costs that aren’t covered by Medicare, so he appears to have his health insurance needs met as well.
With no life insurance policy in place, premiums can be prohibitively costly for a retiree to get a new policy at this stage, but Joe may not have any need of life insurance coverage. It all depends upon whether he has family or friends who will have to bear the costs of his funeral once he passes away. If he has no one to whom the final expenses will fall, or has set enough aside for this on his own, then he’s set. If, however, he has children or grandchildren who will have to pick up these costs, it would have been helpful had he taken out a small policy earlier in his life when the rates would have been reasonable.
On the other hand, if he has a significant amount of money set aside, money that he has earmarked solely to be left to his heirs as an inheritance, he could leverage that into a greater legacy by taking advantage of a single premium life product. Depending upon the choice of single premium life insurance, the total money passed on to the beneficiaries can exceed that from traditional investments, and with proper planning, the death benefit will exempt from income tax.